The Central Board of Direct Taxes (CBDT) in India has released the Finance Act 2024, passed on 15 February 2024, to execute the provisions of the Union Budget for 2024-2025. The finance Act includes the following key tax measures:
- The criteria for qualifying as a startup eligible for a 100% profits and gains deduction under Section 80-IAC has been modified to encompass startups incorporated up to 31 March 2025.
- Extending the tax deduction under Section 80LA for IFSC units, where income is generated from the transfer of assets like aircraft or ships, and which begin operations before 31 March 2025.
- The exemption provided under Section 10(4F) will persist for non-residents receiving royalty or interest due to leasing an aircraft or ship, facilitated by a unit in an IFSC, provided the unit starts operations on or before 31 March 2025.
- Withdrawal of disputed income tax demands, amounting to INR 25,000 for fiscal year 2009-10 and INR 10,000 for fiscal years 2010-11 to 2014-15.
- The sunset clause for the concessional tax rate of 15% for manufacturers under 115BAB remains unchanged.
- Continuation of the exemption provided under Section 10(4D) for income arising from the transfer of capital assets on a recognized stock exchange within an International Financial Services Centre (IFSC), contingent upon the commencement of operations by the investment division of an offshore banking unit before 31 March 2025.
- The exemption under Section 10(23FE) for income derived by Sovereign Wealth Funds and other specified funds, including dividends, interest, and long-term capital gains from investments in India, will persist provided the investment is made on or before 31 March 2025.
