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Taxation Central Ministry of Finance Income Tax Act, 1961

Issuance of the Finance Act, 2023

31-Mar-2023 | CG-DL-E-31032023-244830

Ministry of Law and Justice has issued Finance Act, 2023, effective from 1st April 2023. The key highlights are: 1. Tax Audit Under Section 44AB: Every person engaged in business/profession needs to audit accounts if total sales, turnover, or gross receipts exceed Rs. 1 crore (for business) or Rs. 50 lakh (for profession). 2. Relaxation in Preliminary Expenses Deduction [Sec. 35D]: a. Section 35D allows the amortization of preliminary expenses incurred by Indian companies or residents. b. Changes aim to facilitate deductions related to preliminary expenses. 3. Amendment in Filing of Return of Income: Section 10AA, dealing with deductions for special economic zones, now aligns with Section 139(1) regarding the filing of returns before the due date. 4. Deductions and Exemptions: Receipts from life insurance policies issued on or after April 1st, 2023, will be considered income from other sources if the premium paid exceeds ?5,00,000 in a given year. Exemptions for proceeds in case of the insured person's death remain unchanged. To avail a deduction under Section 10AA, the assessee must submit a return of income on or before the due date specified under Section 139(1). Deduction under Section 10AA will be allowed only if proceeds from the sale of goods or provision of services are received in convertible foreign exchange within six months from the end of the previous year or within a further period allowed by the competent authority. 5. Tax Rates: In the alternate tax regime under Section 115BAC, revisions to the basic exemption limit and the number of slabs are proposed. The revised basic exemption limit is INR 3,00,000. For every additional INR 3,00,000 of income, the next slab rate will be applicable. 4. Applicability of Sections 128 to 163: Sections 128 to 163 will come into force on a date specified by the Central Government through an official Gazette notification.

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