Lok Sabha on Friday passed the Finance Bill 2023 with 64 official amendments, including the one that seeks withdrawal of long-term tax benefits on certain categories of debt mutual funds and raising securities transaction tax.
The Finance Bill that gives effect to tax proposals for fiscal year starting April 1 was passed without a discussion amidst ruckus by opposition members demanding a JPC probe into the allegations against the Adani Group.
Mutual funds having less than 35% AUM in domestic equity to lose indexation benefit, to be taxed as short-term capital gains. Currently, such mutual fund schemes attract 20% LTCG with indexation benefits.
Holders of MF schemes that invest up to 35% of their assets in equity shares would be taxed as per their slab rates. The proposal will bring parity in taxation between a market-linked debenture and a MF, which invests majority of its funds in debts.
There should be parity between various debt instruments. Income that is being earned as interest needs to be taxed, said Finance Secretary T V Somanathan.
Securities Transaction Tax on options sale hiked to Rs 6,200 on a turnover of Rs 1 crore versus Rs 5,000 earlier. STT on futures sale hiked to Rs 1,250 on a turnover of Rs 1 crore versus Rs 1,000 earlier.
The government on Friday announced that a committee under the finance secretary will be set up to improve the New Pension System with a view to take care of the concerns of employees while maintaining fiscal prudence.
Enhanced tax benefits to offshore banking units operating in GIFT City, offshore banking units to get 100% deduction on income for 10 years.
No change in taxation on REITS/InvITs despite representation. Income from REITS to be taxed as "income from other sources" and not as capital gains.
Lok Sabha cleared changes in the Finance Bill to pave the way for setting up of an appellate tribunal for resolution of disputes under GST. Currently, taxpayers are filing writ petitions before high courts in the absence of the appellate tribunal.