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Core Purpose

Finance (No. 2) Bill, 2024 (Bill No. 55 of 2024), introduced in the Lok Sabha to give effect to the financial proposals of the Central Government for the financial year 2024-2025, including revised rates of income-tax and surcharge.

Detailed Summary

This is Bill No. 55 of 2024, the Finance (No. 2) Bill, 2024, introduced in the Lok Sabha on 23rd July 2024 to give effect to the financial proposals of the Central Government for the financial year 2024-2025. Under section 1, the Act, to be styled the Finance (No. 2) Act, 2024, provides that sections 2 to 87 are deemed to have come into force on 1st April 2024, while sections 110 to 153 come into force on a date to be notified by the Central Government in the Official Gazette. Chapter II (Rates of Income-tax), section 2, provides that for the assessment year commencing 1st April 2024, income-tax is chargeable at rates specified in Part I of the First Schedule, increased by surcharge as provided therein, and sets out the mechanism under Paragraph A of Part I or sub-section (1A) of section 115BAC of the Income-tax Act, 1961 (43 of 1961) for aggregating net agricultural income exceeding Rs. 5,000 with total income exceeding Rs. 2,50,000, including age-based thresholds of Rs. 3,00,000 for individuals aged 60-79 and Rs. 5,00,000 for those aged 80 or above. For cases under Chapter XII, XII-A, XII-FA, XII-FB or sections 115JB, 115JC, 161(1A), 164, 164A or 167B of the Income-tax Act, tax is chargeable per those provisions, with surcharge on tax computed under sections 111A, 112 or 112A per Part I of the First Schedule, subject to specified exclusions for domestic companies under sections 115BAA/115BAB and certain assessees taxed under section 115BAC(1A), 115BAD or 115BAE. For income chargeable under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BA, 115BB, 115BBA, 115BBC, 115BBF, 115BBG, 115BBH, 115BBI, 115BBJ, 115E, 115JB or 115JC, surcharge is prescribed on a graduated basis: for individuals, Hindu undivided families, associations of persons or bodies of individuals without section 115AD income, rates of 10% (income above Rs. 50 lakh up to Rs. 1 crore), 15% (above Rs. 1 crore up to Rs. 2 crore), 25% (above Rs. 2 crore up to Rs. 5 crore) and 37% (above Rs. 5 crore) apply; for those with section 115AD income, similarly tiered rates of 10%, 15%, 25% and 37% apply, with surcharge on dividend-related or section 115AD(1)(b) income capped at 15%, and no surcharge on section 115AD(1)(a) income of a specified fund under clause (c) of the Explanation to clause (4D) of section 10; and for an association of persons consisting only of companies, a 10% rate is specified.

Full Text

REGISTERED NO. DL—(N)04/0007/2003—24 The Gazette of India EXTRAORDINARY PART II — Section 2 PUBLISHED BY AUTHORITY No. 8] NEW DELHI, TUESDAY, JULY 23, 2024/SRAVANA 1, 1946 (SAKA) Separate paging is given to this Part in order that it may be filed as a separate compilation. LOK SABHA ———— The following Bill was introduced in Lok Sabha on 23rd July, 2024:— BILL NO. 55 OF 2024 A Bill to give effect to the financial proposals of the Central Government for the financial year 2024-2025. BE it enacted by Parliament in the Seventy-fifth Year of the Republic of India as follows:— CHAPTER I PRELIMINARY 1. (1) This Act may be called the Finance (No. 2) Act, 2024. Short title and commencement. (2) Save as otherwise provided in this Act,–– (a) sections 2 to 87 shall be deemed to have come into force on the 1st day of April, 2024; (b) sections 110 to 153 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. CHAPTER II RATES OF INCOME-TAX 2. (1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 2024, income-tax shall be charged at the rates specified in Part I of the First Schedule and such tax shall be increased by a surcharge, for the purposes of the Union, calculated in each case in the manner provided therein. Income-tax. (2) In the cases to which Paragraph A of Part I of the First Schedule applies, or in the cases where income is chargeable to tax under sub-section (1A) of section 115BAC of the Income tax Act, 1961 (hereinafter referred to as the Income-tax Act) and, where the assessee has, in the previous year, any net agricultural income exceeding five thousand rupees, in addition to total income, and the total income exceeds two lakh fifty thousand rupees, then,— 43 of 1961. (a) the net agricultural income shall be taken into account, in the manner provided in clause (b) (that is to say, as if the net agricultural income were comprised in the total income after the first two lakh fifty thousand rupees of the total income but without being liable to tax), only for the purpose of charging income-tax in respect of the total income; and (b) the income-tax chargeable shall be computed as follows:— (i) the total income and the net agricultural income shall be aggregated and the amount of income-tax shall be determined in respect of the aggregate income at the rates specified in the said Paragraph A or sub-section (1A) of section 115BAC, as if such aggregate income were the total income; (ii) the net agricultural income shall be increased by a sum of two lakh fifty thousand rupees, and the amount of income-tax shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Paragraph A or sub-section (1A) of section 115BAC, as if the net agricultural income as so increased were the total income; (iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax in respect of the total income: Provided that in the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year, referred to in item (II) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words “two lakh fifty thousand rupees”, the words “three lakh rupees” had been substituted: Provided further that in the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year, referred to in item (III) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words “two lakh fifty thousand rupees”, the words “five lakh rupees” had been substituted: Provided also that in the cases where income is chargeable to tax under sub-section (1A) of section 115BAC of the Income-tax Act, the provisions of this sub-section shall have effect as if for the words “two lakh fifty thousand rupees”, the words “three lakh rupees” had been substituted. (3) In cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB or section 115JC or Chapter XII-FA or Chapter XII-FB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income tax Act apply, the tax chargeable shall be determined as provided in that Chapter or that section, and with reference to the rates imposed by sub-section (1) or the rates as specified in that Chapter or section, as the case may be: Provided that the amount of income-tax computed in accordance with the provisions of section 111A or section 112 or section 112A of the Income-tax Act shall be increased by a surcharge, for the purposes of the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First Schedule, except in case of a domestic company whose income is chargeable to tax under section 115BAA or section 115BAB of the Income-tax Act or in case of an individual or Hindu undivided family or association of persons, or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act whose income is chargeable to tax under sub-section (1A) of section 115BAC of the Income tax Act, or in case of co-operative society resident in India, whose income is chargeable to tax under section 115BAD or under section 115BAE of the Income-tax Act: Provided further that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BA, 115BB, 115BBA, 115BBC, 115BBF, 115BBG, 115BBH, 115BBI, 115BBJ, 115E, 115JB or 115JC of the Income-tax Act, the amount of income-tax computed under this sub-section shall be increased by a surcharge, for the purposes of the Union, calculated,— (a) in the case of every individual or Hindu undivided family or association of persons except in a case of an association of persons consisting of only companies as its members, or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub clause (vii) of clause (31) of section 2 of the Income-tax Act, not having any income under section 115AD of the Income tax Act, and not having any income chargeable to tax under sub-section (1A) of section 115BAC of the Income-tax Act,— (i) having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such income-tax; (ii) having a total income exceeding one crore rupees, but not exceeding two crore rupees, at the rate of fifteen per cent. of such income-tax; (iii) having a total income exceeding two crore rupees, but not exceeding five crore rupees, at the rate of twenty five per cent. of such income-tax; and (iv) having a total income exceeding five crore rupees, at the rate of thirty-seven per cent. of such income-tax; (b) in the case of every individual or association of persons, except in a case of an association of persons consisting of only companies as its members or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, having income under section 115AD of the Income-tax Act, and not having any income chargeable to tax under sub-section (1A) of section 115BAC of the Income-tax Act,— (i) having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such income-tax; (ii) having a total income exceeding one crore rupees, but not exceeding two crore rupees, at the rate of fifteen per cent. of such income-tax; (iii) having a total income [excluding the income by way of dividend or income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Income-tax Act] exceeding two crore rupees but not exceeding five crore rupees, at the rate of twenty-five per cent. of such income-tax; (iv) having a total income [excluding the income by way of dividend or income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Income-tax Act] exceeding five crore rupees, at the rate of thirty-seven per cent. of such income-tax; and (v) having a total income [including the income by way of dividend or income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Income-tax Act] exceeding two crore rupees but is not covered in sub-clauses (iii) and (iv), at the rate of fifteen per cent. of such income-tax: Provided that in case where the total income includes any income by way of dividend or income chargeable under clause (b) of sub-section (1) of section 115AD of the Income-tax Act, the rate of surcharge on the income-tax calculated on that part of income shall not exceed fifteen per cent.: Provided further that where the total income of a person, being a specified fund referred to in clause (c) of the Explanation to clause (4D) of section 10 of the Income-tax Act, includes any income under clause (a) of sub-section (1) of section 115AD of the Income-tax Act, the income-tax computed on that part of income shall not be increased by any surcharge; (c) in the case of an association of persons consisting of only companies as its members,— (i) at the rate of ten per cent. of such income-tax,

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