Income Tax and GST Updates Effective from 1st January 2025
Changes to Tax Collected at Source (TCS) Rates
Applicability under Section 206C(1F):
- Motor Vehicles: A TCS rate of 1% applies to the sale of motor vehicles exceeding ₹10 lakh.
- Other Goods: TCS at 1% applies to goods specified by the Central Government via notification.
These changes, introduced by the Finance (No. 2) Act, 2024, will take effect from January 1, 2025. Taxpayers are advised to await further detailed notifications for comprehensive guidance. Income Tax and GST Updates Effective from 1st January 2025
https://www.incometax.gov.in/iec/foportal/
Multi-Factor Authentication (MFA) for E-Way Bill and E-Invoice Portals
Current Implementation:
- Mandatory for taxpayers with an Annual Aggregate Turnover (AATO) exceeding ₹100 crores since August 20, 2023.
- Optional for those with AATO exceeding ₹20 crores since September 11, 2023.
Upcoming Phases:
- From January 1, 2025: Mandatory for taxpayers with AATO exceeding ₹20 crores.
- From February 1, 2025: Mandatory for taxpayers with AATO exceeding ₹5 crores.
- From April 1, 2025: Mandatory for all taxpayers.
Taxpayers are encouraged to activate MFA promptly and verify their registered mobile numbers to avoid disruptions in compliance processes.
Changes to E-Way Bill (EWB) Rules
Restricted EWB Generation Period:
- Effective January 1, 2025, EWB generation will be limited to documents dated within 180 days of the generation date. For example, documents dated before July 5, 2024, will not qualify for EWB generation on January 1, 2025.
Restricted EWB Extension Period:
- Extensions for EWBs will be capped at 360 days from their original generation date. For instance, an EWB generated on January 1, 2025, can only be extended until December 25, 2025.
- For Better Understanding Watch Our Video – https://youtu.be/vfsOyHFLFog
Filing of Income Tax Returns (ITR) for FY 2023-24
- The deadline for filing revised or belated ITRs ended on December 31, 2024.
- Taxpayers can now only file ITR-U (Updated Return), with no refunds permissible under this mechanism.
Announcements from the 55th GST Council Meeting
Key Measures and Rate Changes:
- Composite Taxpayers: Exempt from Reverse Charge Mechanism (RCM) when renting commercial property from an unregistered person.
- Late Fee Waiver for GSTR-9C:
- Late fees on GSTR-9C filings for FY 2017-18 to FY 2022-23 are waived if GSTR-9 has been filed.
- Pending GSTR-9C filings can be submitted without penalty until March 31, 2025.
- For Better Understanding Watch Our Video – https://youtu.be/V0O89mjnJ14
Invoice Management System (IMS)
- The Invoice Management System (IMS) is now operational on the GST portal.
- Expected to become mandatory in 2025 for generating GSTR-2B.
Impact on GSTR-3B Filing:
- With IMS actions beginning from the 14th of each month and GSTR-3B filing due by the 20th, taxpayers must prepare for shorter reconciliation timelines.
Filing Deadlines for GSTR-9 and GSTR-9C
- The deadline for GSTR-9 and GSTR-9C filing for FY 2023-24 is December 31, 2024.
- Late filings will incur penalties post this date.
Track and Trace Mechanism
The introduction of a Track and Trace Mechanism aims to enhance compliance and accountability within the GST framework. Detailed guidelines are expected soon.
Updated GSTR-3B Filing Timelines with IMS
With mandatory IMS implementation, actions commence by the 14th of each month, requiring timely preparation to file GSTR-3B by the 20th.
GST Rate Changes
Categories Impacted:
- Old vehicles
- Hotels
- Popcorns
Further clarifications on specific rate revisions are anticipated from the GST Council
For Better Understanding Watch video – https://youtu.be/V0O89mjnJ14
Correction of TDS and TCS Return Filing
Amendment to Section 200(3):
- No correction statements for TDS/TCS will be accepted after six years from the financial year’s end.
- Correction statements for FY 2007-08 to FY 2018-19 must be submitted by March 31, 2025.
Tax Planning for FY 2024-25
Important Due Date:
- ITR filing due by July 31, 2025.
For Salaried Individuals:
New Tax Regime Highlights:
- No tax for incomes up to ₹7 lakh (with ₹25,000 rebate under Section 87A).
- Standard Deduction: ₹75,000.
- Family Pension Deduction: ₹25,000.
Capital Gains Tax:
- Short-Term Capital Gains (STCG): 20%.
- Long-Term Capital Gains (LTCG): 12.5% without indexation.
- LTCG Exemption (Equity): ₹1.25 lakh.
TCS Deduction Considerations: for salaried person
For Better Understanding watch our video – https://youtu.be/WH4G5bwhaqg
Tax implications for share buybacks in the hands of shareholders.
For Business Owners:
- Evaluate annual income and choose an appropriate tax regime.
- Account for all deductions and exemptions.
Amended TDS on Property Sales
- TDS will be deducted on the entire transaction value exceeding ₹50 lakh, irrespective of individual shares.
- Impact: Prevents tax evasion in property transactions.
Taxpayers and businesses should plan and adapt to these changes proactively to ensure compliance and optimize tax benefits.
For Better Understanding Watch Video – https://youtu.be/ScRNrYbz3jM
For More Information : https://taxgyany.com/