General

1. In new tax regime, tax rate slabs  of NIL, 5%,10%, 15%, 25% and 30% have been widened with spacing of 4 lacs ranging from 4 lacs to 24 lacs as compared to earlier spacing of 3 lacs form 3 lacs to 15 lacs. 2. Eligibility of Rebate under section 87A increased from 7 lacs to 12 lacs and rebate of 60,000 shall be available on income up to 12 lacs. Thus tax shall be reduced to NIL under new tax regime, if income is up to 12 lacs 3. Rebate u/s 87A  shall not be available for income taxed at special rates of tax like tax on short term or long term capital gain 4. Registration of trus t already granted shall not be cancelled only because application for registration of trust is not complete. 5. * Period of renewal of registration for Trusts* having income below Rs. 5 crores increased from 5 years to 10 years 6. Limit of *substantial contribution* for imparting benefit to the contributor by the trust increased from 50 thousands for relevant previous to Rs. 1 lakh. Also aggregate ...

  Introduction The government introduced new regulations through the Finance Bill 2023 to bolster the recovery of accounts receivable in the MSME sector. These regulations significantly impact the deductibility of payments made only to Micro and Small Enterprises under the Income Tax Act. Classification of MSMEs Classification of Micro, Small, and Medium enterprises is based on a composite criteria of investment in plant and machinery or equipment and annual turnover as prescribed:   Key Takeaways: Ø   Timely payments are crucial: To claim the expense deduction, business assessees must pay MSMEs within the time limits specified in the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The payment thus must be made within 15 days from the acceptance of goods or services which may be extended to 45 days, if a mutual agreement exists. Ø   Enterprise Size matters: The new rule only applies to micro and small enterprises, not medium e...