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Opportunities for Indian CDMOs?

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Income Tax Slabs

Tax Slab for FY 2023-24 Tax Rate Tax Slab for FY 2024-25 Tax Rate
Upto 3 lakh Nil Upto 3 lakh Nil
3 lakh-6 lakh 5% 3 lakh-7 lakh 5%
6 lakh-9 lakh 10% 7 lakh 10 lakh 10%
3 lakh-7 lakh 15% 10 lakh 12 lakh 15%
12 lakh-15 lakh 20% 12 lakh-15 lakh 20%
More than 15 lakh 30% More than 15 lakh 30%

Standard deduction

Rs 75,000 for those individual taxpayers who are having income from salary or pension

Standard deduction

Rs 25,000 for those individual taxpayers who are receiving family pensions

Taxes on Investment Products

Types of financial product Holding Period STCG Tax Rate LTCG Rate
Fixed Deposits Interest income is taxable at per the tax slab of the investor. If FD interest is above Rs.50,000, a 10% TDS would be deducted by the institution which can be adjusted by the investor against his/her final tax liability
Listed Bonds and Debentures Up to 12 months As per tax slab of the investor
More than 12 months 12.5%
Unlisted Bonds/ Market Linked Debentures (MLDs) Up to 24 months As per tax slab of the investor
More than 24 months 12.5%
Interest Income from Bonds Interest income would be classified as income from other sources and taxed as per tax slab of the investor. If interest income is more than Rs.10,000, TDS would be deducted at a rate of 10%
Debt Mutual Funds (any funds that has more than 65% in Indian debt instruments)/Debt ETFs (domestic & international) Less than 24 months As per tax slab of the investor
More than 24 months As per tax slab of the investor
Listed equity shares/Equity Mutual funds/Indian Fund of Funds (FOFs) (i.e. invest at least 65% of their money in Indian stocks) Up to 12 months 20%
More than 12 months 12.5% on cumulative LTCG exceeding Rs 1.25 lakh in a Fin Year
Overseas Fund of Funds (FOFs) – Equity Less than 24 months As per tax slab of the investor
More than 24 months 12.5%
Unlisted Equity shares/preference shares Up to 24 months As per tax slab of the investor
More than 24 months 12.5%
Dividends & Buy Backs
  1. Would be taxed as per tax slab of the investor. Buybacks to be treated as dividends and taxed as per tax slab from Oct 1 2024.
  2.  A TDS of 10% would be deducted for dividends above 5000 for Indian residents but the investor can claim credit against tax liability while filing Income Tax returns
  3. A TDS of 20% is deducted for NRIs. However, they can avail lower tax on dividends by submitting Form 10F, Tax residency certificate, beneficial ownership declaration etc.
Foreign Shares Up to 24 months As per tax slab of the investor
More than 24 months 12.5%
Dividend Gains from Foreign shares Taxed at a flat rate of 25 per cent in the US. This income is also added to total income and taxed in India but this amount can be reduced by the tax paid in US based on DTAA
Real Estate Less than 24 months As per tax slab of the investor
More than 24 months
  1. For property acquired before July 23, 2024, will have the option to choose between a) 12.5% LTCG tax without indexation) or b) 20% LTCG tax with indexation)
  2. For property acquired afterJuly 23, 2024 – 12.5% LTCG tax without indexation
Gold/Silver Mutual Funds Up to 24 months As per tax slab of the investor
More than 24 months 12.5%
Gold/Silver ETFs Up to 12 months As per tax slab of the investor
More than 12 months 12.5%
Sovereign Gold Bonds – Capital Gains Up to 12 months As per tax slab of the investor
More than 12 months 12.5%
Sovereign Gold Bonds – Interest Interest income would be classified as income from other sources and taxed as per tax slab of the investor
Physical Gold & Jewellery Up to 24 months As per tax slab of the investor
More than 24 months 12.5%
REITs/InVITs – Income Up to 12 months 20% for residents and 10% for NRIs
More than 12 months 12.5%
REITs/InVITs – Dividends Dividends and Interest income are taxed as per tax slab of the investor. Dividend income is also subject to a 10% TDS.
ESOPs
  1. At the time of exercise – the difference between the FMV (on exercise date) and the exercise price is taxed as perquisite and shown as total income from salary
  2. At the time of sale where capital gains occur between sale price and FMV on the exercise date
  3. If sold within a year – STCG at 20% and if sold more than a year -then LTCG at 12.5%
Employee Provident Funds
  1. Employee’s contribution to the EPF account is allowed as a deduction up to Rs 1.5 lakh under Section 80C
  2. Interest on an employee’s contribution to an EPF account above Rs 2.5 lakh (for Govt employee – above 5 Lakhs) during the fin year is taxable in the hands of the employee and subject to TDS.
  3. EPF withdrawal becomes taxable if withdrawn before 5 years of completed service
Public Provident Fund (PPF) The PPF interest and maturity amount are tax-free under section 80C
National Pension Scheme (NPS)
  1. Employees opting for New Tax Regime are now entitled to a deduction of up to 14% of their basic salary for the contributions made by the employer towards the NPS on behalf of the employee under Section 80CCD(2)
  2. Please note that that the total deductions under Section 80C, Section 80CCC, and Section 80CCD cannot exceed Rs 1.5 lakh.
  3. Furthermore, Section 80CCD (1B) provides an additional deduction of up to Rs 50,000 for NPS contributions, which is in addition to the Rs 1.5 lakh limit available under Section 80CCD (1).
Tax disclaimer: The taxes shown above are compiled based on publicly available information and should not be relied on filing taxes. Do consult a chartered accountant or a tax consultant for accuracy of your tax implication before filing your returns.