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what are the controversial terms in the finance bill 2024?

Controversial Terms in the Finance Bill 2024

1. Taxation of Virtual Digital Assets (VDAs)

• Imposition of 30% tax on income from the transfer of VDAs, including cryptocurrencies.

• Concerns raised about the lack of clarity in defining VDAs and the potential impact on innovation in the crypto industry.

2. Increase in Minimum Alternate Tax (MAT)

• Increase in MAT rate from 15% to 18.5% for companies with book profits exceeding ₹10 crore.

• Criticism that it will increase the tax burden on profitable companies and discourage investment.

3. Tax on Employee Stock Options (ESOPs)

• Taxation of ESOPs at the time of exercise, instead of the time of sale.

• Concerns that it will discourage startups from offering ESOPs as a form of employee compensation.

4. Surcharge on Income from Professions

• Imposition of a 10% surcharge on income from professions exceeding ₹50 lakh.

• Criticism that it unfairly targets professionals and may discourage entrepreneurship.

5. Tax on Foreign Remittances

• Imposition of a 20% tax on remittances exceeding ₹7 lakh per year.

• Concerns that it will discourage remittances from overseas Indians and impact the foreign exchange market.

6. Tax on Online Gaming

• Imposition of 28% GST on online gaming services.

• Concerns that it will stifle the growth of the online gaming industry and lead to job losses.

7. Tax on Non-Resident Indians (NRIs)

• Removal of the exemption on interest income earned by NRIs on deposits in Indian banks.

• Criticism that it will discourage NRIs from investing in India and impact the flow of foreign capital.

8. Tax on Capital Gains from Sale of Immovable Property

• Increase in the holding period for claiming exemption from capital gains tax on the sale of immovable property from 2 years to 3 years.

• Concerns that it will discourage real estate investment and impact the housing market.

9. Tax on Dividend Income

• Removal of the dividend distribution tax (DDT) and imposition of tax on dividends in the hands of shareholders.

• Criticism that it will increase the tax burden on individual investors and reduce the attractiveness of dividend-paying stocks.

10. Tax on Agricultural Income

• Proposal to tax agricultural income above a certain threshold.

• Concerns that it will discourage agricultural investment and impact the livelihoods of farmers.

Answered by mwakili.com

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