20/10/2023
The latest Income Tax Paripatra for 2023-2024, and here are some general clarifications that have come to light:
Tax Assessment:
For the assessment year 2023-2024, tax assessment has to follow the guidelines of the Income Tax Act, 2023, and the Finance Act, 2023. This includes the issuance of notices, hearing dates, and assessment procedures.
Notably, provisions related to expenditure disallowance for non-compliance with income assessment are now introduced under the Income Tax Act, 2023, applicable from the next assessment year (2024-2025).
Income from 'Interest on Securities' to 'Financial Assets':
The Income Tax Act, 2023, consolidates various interest-related incomes under the same income category. This means that dividends, bank interest, and profit on savings certificates fall under "income from financial assets" and are subject to "Minimum Tax" now.
Tax Audit Cases:
Audit cases selected by the board before the effective date of the Income Tax Act 2023 must be completed according to the provisions of the Income Tax Ordinance, 1984.
TDS under Minimum Tax:
TDS deductions from certain (40) sources now fall under the purview of Minimum Tax due to the Income Tax Act, 2023. However, the minimum tax provision applies only if there is a 'pre-existing obligation' to maintain separate accounts or any other conditions mentioned under section 163 of ITA 2023.
Retrospective and Prospective Effects:
The tax rate applicable for determining tax on the income of a person for any income year i.e. tax rate or minimum tax rate fixed by Finance Act shall be applied retrospectively.
In all other cases such as:
- all provisions relating to compliance;
- all provisions creating liability arising out of failure to comply;
- provisions relating to levy or collection of tax at source;
- provisions relating to filing of returns;
- provisions relating to imposition of penalty;
all these shall apply prospectively.
But in this case care should be taken on the timeline of applicability, which provisions are applicable immediately and which provisions are applicable from the next tax year. As such, any provisions relating to filing of returns will be applicable from July 1. Again regarding approval or disapproval of any kind of expenditure, the provisions will be applicable from the next tax year. Similarly, the provision of taking any action or imposition of penalty under Part-VII for violation of any provision relating to compliance of tax at source shall come into force from 1st July.
Hope it will help you to stay informed, stay compliant, and stay ahead in your financial endeavors.
