UnionBudget2024 – TransferPricing Takeaways
The full year Union Budget for 2024-25 was presented by the finance minister on 23 July 2024. VSTN alert summarizes the Transfer pricing updates viz.,
- Power given to Transfer pricing Officer (TPO) to scrutinize Specified Domestic transactions not referred by the Assessing Officer (AO)
- Announcement in the Budget speech on widening the scope of Safe Harbour and to update arm’s length conditions prescribed therein to make it more attractive for taxpayers. Safe Harbour rules are to be extended to foreign mining companies selling raw diamonds in India. These, however are not mentioned in the Finance (No.2) Bill 2024 or the memorandum to the said Bill.
- Finance Companies in IFSC are exempt from the purview of Section 94B – Limitation on interest deduction.
- Reduction of Corporate Tax rates to 35% for foreign companies.
- Rationalization of time limits for filing appeal before Income Tax Appellate Tribunal (ITAT) to 2 months from the end of the month in which the order sought to be appealed is communicated.
- Vivad Se Vishwas Scheme announced for 2024.
- Streamlining of Transfer pricing assessment proceedings.
- Withdrawal of Equalization levy, marking implementation of Pillar One and Pillar Two in India in the near term.
The finance minister in her Budget speech announced that the monetary limits for filing appeals by the revenue would be increased to INR 60 lakhs before Tax Tribunals, INR 2 crores before High Court and INR 5 crores before Supreme Court.
As a follow-up to the Budget, it is expected that draft regulations of Pillar One and Pillar Two and the revised rules for Safe Harbour Rules will be issued in the near term.