Budget has 10 big tax changes for India Inc: What you need to know

Union Finance Minister Nirmala Sitharaman presented her eighth consecutive Budget, laying focus on India Inc and 'ease of doing business'.

The government has introduced several tax reforms to ease compliance, reduce burdens on businesses, and encourage investment.

From tax breaks for startups to simplified TDS and TCS rules, these changes aim to make tax filing smoother for India Inc. Here are the key updates:

1. Tax break for startups – Eligible startups can enjoy a three-year tax holiday within their first 10 years of operation.
2. Limited loss carry forward in mergers – In business mergers, the new company can only carry forward losses for the remaining years instead of starting fresh.
3. Higher TDS Limits – The minimum limit for TDS deductions on payments like rent and technical services has been raised, reducing compliance hassles for smaller transactions.
4. Simpler TDS/TCS on goods sales – Now, only TDS at 0.1% will be charged on goods sales exceeding ₹50 lakh, removing the confusion of double taxation.
5. No extra TDS/TCS for non-filers– The extra 20% tax deduction on non-tax filers has been removed, making compliance easier.
6. No prosecution for late TCS payment – Businesses won’t face legal action for delays in depositing TCS, as long as they file it on time.
7. More time for updated tax returns – Companies now have four years instead of two to correct tax filings, with an extra tax of 60% in the third year and 70% in the fourth year.
8. Transfer pricing certainty – Businesses can use the same transfer pricing rate for three years, reducing tax disputes in related-party transactions.
9. Faster penalty orders – Tax authorities must now issue penalty orders within six months after case proceedings, speeding up the process.
10. Lower taxes for foreign tech providers – Overseas service and tech providers working with Indian electronics manufacturers will be taxed on only 25% of their revenue.