On the 23rd of January 2024, the Central Board of Direct Taxes issued Circular No. 01/2024, elucidating the modifications to the Income Tax Act, 1961, introduced by the Finance Act of 2023. The Finance Act, 2023, approved by Parliament, obtained the President’s assent on March 31, 2023, and is now enacted as Act No. 8 of 2023.
The circular introduces itself as “This circular clarifies the substance of the provisions of the FA 2023 associating to direct taxes.”
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Apart from explaining provisions within the Income Tax Act, the board has provided additional clarifications concerning amendments in other legislations affecting direct taxes. These legislations include The Finance (No. 2) Act, 2004, The Prohibition of Benami Property Transactions Act, 1988, and the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002.
As outlined in the circular, the Finance Act of 2023 has introduced modifications to the Income Tax Act, specifying the prevailing rates of income tax for the AY 2023-24. It has also amended certain sections of the Income-tax Act, altering the rates of income tax for the purpose of tax deduction at source and advance tax payments during the financial year 2023-24. The Finance Ministry, within the circular, emphasizes crucial provisions, offering detailed explanations to facilitate a comprehensive comprehension of the alterations in various acts through the Finance Act.
This information is intended to aid stakeholders, including Chartered Accountants, income tax officials, taxpayers, etc., in gaining a thorough understanding of the amendments.