Finance Bill 2023 Passed: Key Takeaways The Lok Sabha on Friday approved The Bill with 64 official amendments
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The Finance Bill, which gives effect to tax proposals for the fiscal year starting April 1, was passed in the Lok Sabha on Friday, March 24. A total of 64 official amendments were proposed in the Bill. Speaking while moving the Bill, Union finance minister Nirmala Sitharaman, said the Centre received recommendations that the National Pension System for government employees needs to be improved. "I propose to set up a committee under the Finance Secretary to look into the issue of pensions & evolve an approach which addresses the needs of employees while maintaining fiscal prudence to protect common citizens," she said.
She also highlighted that payments for foreign tours through credit cards are not being captured under the Liberalised Remittance Scheme (LRS) and they escape tax collection at source. "I request RBI to look into this with a view to bring credit card payments for foreign tours within the ambit of LRS and tax collection at source thereon."
It also focuses on providing tax relief to some taxpayers opting for a new tax regime and removing long-term tax benefit for debt mutual funds to bring them at par with other interest earning instruments. "The new Finance Bill amendment affects debt funds, gold funds, international equity funds and FoFs. Starting 1st Apr 2023, the indexation benefit is gone, with all funds taxed at STCG regardless of holding tenure," tweeted Capitalmind, an investment research and wealth management firm.
Some of the other amendments include: Mutual funds having less than 35 per cent AUM in domestic equity to lose indexation benefit, to be taxed as short-term capital gains; enhanced tax benefits to offshore banking units operating in GIFT city, offshore banking units to get 100 per cent deduction on income for 10 years; tax on royalty or technical fee earned by foreign (non-resident) companies hiked from 10 per cent to 20 per cent; no change in tax on non-par savings insurance products ( INR 5 lakh cap remains); marginal relief proposed to the tax that one pays should not be more than the income that exceeds INR 7 lakh (INR 100 in this case).
On Thursday, the House had passed the Union Budget 2023 within 12 minutes without any discussion. Lok Sabha Speaker Om Birla ordered a guillotine to pass the Budget and the Finance Bill this week. A guillotine is a parliamentary procedure that is used to fast-track the passage of a bill without discussion. It is usually applied when the government is keen on passing a bill but the opposition is blocking the same.
