Budget 2024 Updates

TPO gets powers to deal with domestic transactionsOne more Vivad Se Vishwas Scheme; Date to be notifiedNo deduction u/s 37 for settlement amount if paid for violation of any lawFM proposes to lessen tedium of TDS; reduces rates in many casesFM overhauls capital gains regime; to come into play from todayFM hikes exemption limit for long-term capital gain to Rs 1.25 lakh + hikes tax rate to 12.5% on specified financial assetsTourism: Temple corridors to be developed in BiharCGST - Finance Bill proposes to amend Sec 9 to take ENA out of purview of GST + inserts Sec 11A to regularise non-levy of tax on general practice in tradeCGST - Sub-sections to be inserted in Act to relax time-limit to avail ITC u/s 16(4) + New Sec 74A proposed to provide for common time limit for demand notices in fraud cases3.4% of GDP allocated as Capital expenditure to support infra sectorCGST - Proviso to be inserted in Sec 30(2) to provide for enabling conditions for revocation of registration + Amendment in Sec 39 to mandate return filing by TDS deductors even if there is no deduction in a particular monthIGST - Amendment proposed to prohibit refund of unutilised ITC on zero-rated supplyIncome tax - Finance bill revamps re-assessment regime againCustoms - Finance Bill proposes to amend Sec 28DA for acceptance of different types of proof of origin under FTAsFM hikes standard deduction to Rs 75K for new ITR regime + revises tax rates for all income slabs + Rs 7000 Cr revenue foregoneIncome tax - Search & Seizure cases - Block assessment is backBudget withdraws 2% equalisation levyFM reduces corporate tax rate for foreign companies to 35%FM proposes vivad se vishwas scheme + hikes monetary limits for filing appealsFM proposes 20% capital gains tax on short-term assets + listed financial assets held for more than one year to be classified as long-termGovt scraps TDS on Mutual Funds + decriminalises delay in depositing TDS + rationalisation of compounding of offences + revamps reassessment periodBudget proposes comprehensive review of I-T Act, 1961 + simplifies provisions for charities and TDSFM reduces customs duty on gold and silver to 6% + Nil BCD on nickel cathodeBudget proposes to reduce BCD on mobile phone and chargers to 15% + exempts 25 minerals from customs dutyFM exempts cancer medicines from Customs duty + amends BCD for various machinesFM proposes Rs 48 lakh expenditure outlay; 4.9% fiscal deficitFM announces Rs 1 lakh crore fund for developing space economyPromotion of Tourism - Vishnupad temple and Bodh Gaya temple corridors to be supportedFM announces over Rs 11 lakh crore capital expenditure in current fiscalGovt to invest in small Nuclear energy plants in partnership with private playersCentre to ask States to lower stamp duty for women purchasers of housesIBC - More Benches of NCLT to be set up to speed up recoveryFM spikes limit of Mudra loan to Rs 20 lakhsBudget offers financial aid to labour-intensive MSMEs in manufacturing sectorGovt announces 3 crore additional houses under PM SchemeGovt to secure Rs 15K loan for AP from multilateral agenciesGovt to frame new policy for all-round development of Bihar, Jharkhand and OdishaGovt to give one-month salary to all new recruits in formal sector through EPFOGovt to promote vegetable clusters closer to urban settlementsGovt to focus on productivity of agriculture with climate-resilient seedsFM allocates Rs 2 lakh outlay for PM's five schemes for job creation and farmersFM Nirmala Sitharaman presents 7th Union Budget in ParliamentBudget 2024: FM arrives at Parliament; Speech to begin at 11AMEconomic Survey 2023-24 - from GST PerspectiveUkrainian FM goes on tour to ChinaI-T- Additions framed u/s 69A are untenable where affidavits submitted by assessee's parents to explain source of cash deposits, were discarded by AO without consideration : ITATSurvey acknowledges productivity loss due to mental health disordersI-T- Short term capital gains returned by the assessee in terms of provisions of section 50 of the Act on assets held for a period of more than 36 months be treated as long term capital gains: ITATExpenditure on social services up from 6.7% to 7.8% of GDP: SurveyI-T-Additions framed u/s 68 are upheld where assessee is unable to prove genuineness of transaction involving purchase and sale of penny stock: ITATTrade deficit contracts to USD 78 bn from USD 126 bn in 2023I-T-Re-assessment is invalidated when there is no failure on part of assessee to make full and true disclosure of facts necessary for assessment: ITATCorporate profitability has peaked to 15-yr-old high between 2020-2023: SurveyI-T- When cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked: ITATBudget 2024: More relief for senior citizens & individual taxpayers on card; tweaking of capital gains tax likely; steady capital expenditure to stayI-T- If any amount invested is purely a strategic investment & for purpose of commercial expediency, then AO cannot hold such investments to be for non-business purpose: ITATGoogle backpedals on plan to scrap cookies from ChromeCus - For a HNWI individual, an expensive watch of 'Rolex' make would be his personal effect but same may not be the case if the person is of mere means - Pendant studded with diamonds not liable for confiscation: HCGovt amends Recruitment Rules for Debts Recovery TribunalGST - Even if no date, time or place of hearing is indicated in the notice issued, it was the duty of assessee to file his reply to SCN, which was admittedly received - Plea regarding violation of principles of natural justice cannot be countenanced: HCAbhinav Bindra conferred with Olympic OrderGST - Mismatch between value of e-way bills generated on portal and returns filed in Form GSTR-3B - Petitioner did not provide a comprehensive explanation - To remit sum of Rs.3.50 crores within six weeks - Matter remanded: HCHackers mercilessly hack Bangladesh PM’s website along with police portalsGST - Rule 30 of Rules, 2017 - Assessing officer ought to have issued summons and obtained clarification rather than estimating the outward supply value at 110% of purchase value - Order set aside and matter remanded subject to remit of 10% disputed tax demand: HCUS law-makers call for resignation of Secret Service chief in Trump assassination caseGST - Net ITC shown incorrectly - An inadvertent error was committed and such error was rectified, albeit irregularly, however, sum recovered from petitioner's bank account - Order set aside and matter remanded: HCKarnataka IT Industries piling pressure on govt to extend working hoursGST - Since notification is declared unconstitutional, Amount of IGST paid pursuant to Entry No. 10 of Notification No. 10 of 2017 is to be refunded along with statutory interest: HCStudy says earth’s water depleting fastFDI inflows slide to USD 26.5 bn in 2024 from USD 42 bn in 2023: Economic Survey
China's itchy ambitions spark nuclear race!

TIOL - COB( WEB) - 926
JUNE 27, 2024

By Shailendra Kumar, Founder Editor

PLAYING with fire ball! Passion for ghoulish infernos - certainly more soul-chilling than the ones referred to in Dante's Divine Comedy! Many global political leaders are fast turning into pyromaniacs! And our planet is being reduced to combustible substance! This is one of the horrific consequences of the rapidly-splintering geopolitical order! Forget about global trade and FDI, the growing canyon between the two powerful military powers, the US and China, has now swerved towards a dizzyingly accelerated nuclear race. Though the tenuous threads of trade between them may survive in size-zero format for some more years but the collapse of international nuclear order would pose serious existential threat to human race! Goosebumps-moments are on the cards! Though the history is replete with parables of such threats a la Cuban Missile Crisis of 1962 but one distinguishable difference is - unlike in the past when there were only two fire-spitting pugilists, we have many today! What makes a seismic difference between the past and the present is the advancement in nuclear technology platforms. With AI flying into our world, it lends deadly precision and helps in ballooning the geographical impact of nuclear warheads! More scaringly, the controlling superpower has lost its hegemonic appetite and looks vulnerable and weakened by bizarro wokism and internal culture wars on its domestic turf!

Let's avoid flirting with qualms of any sort and admit that our geopolitical world now formally stands split into two dangerous blocs in terms of nuke-index! What emerged as a trade war has now pejoratively deteriorated into nuclear arms race! After the Second World War, owing to assiduously-designed arms control and nuclear proliferation treaties and technical mechanisms to curb the number of warheads, the threats of nuclear strikes had become vanishingly rare. What used to be a taboo, even talking about nuke, has almost become a loose 'cannon' for a drawing-room jaw-jaw! Though enriching one's stockpiles of nuclear weapons may have been a secret operation for some countries but none used to talk about them so explicitly - and without a shade of remorse! Of late, known for loose tongue, Russian President Putin has been, without mincing words, threatening to amend Russia's nuclear doctrine and use nuclear weapons if NATO or America gets embroiled in the on-going Ukraine War. Russia has even gone too far by undertaking tactical drill of nuclear warheads on the Ukrainian border. In response to Russia's lengthening silhouette of incendiary rhetoric and also threat to Europe, when the NATO's Secretary General talked about deployment of more nukes on standby, the Kremlin not only dubbed it as escalation of tensions but also issued a sinister warning - "The US and its European allies are pushing the world to the brink of nuclear confrontation by giving Ukraine billions of dollars worth of weapons, some of which are being used against Russian territory".

Though statistics indicates that as many as 31 countries, including Sweden and Brazil, flirted with nukes at one time or another and 17 of them also attempted a formal weapons programme but only 10 succeeded in engineering deliverable missiles. At present, nine countries possess nuclear warheads, including the rebellious child North Korea, which was sanctioned by the UNSC on many occasions. North Korea has been struggling to develop long-range cruise and ballistic missiles and it keeps flight-testing them periodically. Mr Putin last week visited its capital Pyongyang and signed a defence treaty. Though the content of this treaty is not known as yet, but my insight, is that Russia most probably committed to supply some of critical technical knowhow to develop nuclear weapons, including bombs, and delivery toolkit. Immensely supported by China, of course furtively, in the past, North Korea has been desperate to develop long-range ballistic missiles capable of carrying nuclear warheads. North Korea has set its eyeballs not only on Seoul and Tokyo but also some of the American megapolis like San Francisco.

From the days of Ukrainian invasion, China has been forging closer alliance with Russia, North Korea and Iran, to build a stronger geopolitical bloc. To counter and destabilise the US, China has been working on a multi-pronged strategy. One of them is to forge closer trade relations with all those who have been sanctioned by the West. The second is to identify and shield all those countries which see nukes as effective deterrence even if their economic status does not support such expensive luxury. North Korea's growing belligerence has prodded Japan and South Korea to think hard about acquiring nuclear weapons. Tokyo has not only spiked its budget but is also bracing up to go nuclear if Mr Trump comes to power and backslides on American pledge to stand by Japan. South Korea is another angst-ridden state. Its President, in fact, did some loud thinking publicly and said that it has the necessary scientific wherewithal to go nuclear in no time! Iran is another problem child which is only a few inches away from realising its goal of enriching weapon-grade uranium and increasing the number of working centrifuges. With China and Russia mentoring it, Iran has been quite evasive about renewing the Trump-era agreement with the West. Once Iran officially goes nuclear, Saudi Arabia and Turkey are sitting on the fence to acquire nuclear warheads. And if not the West, China would support them to enhance its radar of geopolitical heft! Similarly, China has been helping Pakistan which has been trying to upgrade its nuclear weapons. As per various reports, Pakistan today possesses 165 nuclear warheads as against 160 of India. China tactfully uses Pakistan as its geopolitical shoulder to attack India which has, going by its fathomable posturing, sided with the West a la Quad and strategic partnership with the US. China's another goal is to annex Taiwan by resorting to conventional warfare but is keen to keep American military at arm's length by demonstrating its scary nuclear posturing. All global efforts to sensitise China to respect independent identify of Taipei has proven to be a caviar to the general!

To this end, China has been quietly piling up and fortifying its nuclear arsenal. As per SIPRI report, there are over 12000 nuclear warheads around the world. About 9600 are in silos and 2100 are kept in 'high operational alert' on ballistic missiles. Though America and Russia account for about 88% of such stockpiles, but China has, of late, been seen putting its warheads on operational high alert. A case of canary in the coal mine! Why does a country go for operational alert of one's good part of nuclear arsenal? Certainly not for posturing alone! If creating perception alone is the goal, its stockpiles have proven powerful enough to create the much-needed deterrence. So, why to put a part of one's arsenal on 'high operation alert' which means scaffolding the warheads not only on ballistic and cruise missiles but also in bombers and submarines. In most recent cases, China has been the aggressor a la the last week episode of clashes with Philippines, shoulder-rubbing with the US Destroyers in the South-China Sea and also India on its land borders. No country is today seen as the one preparing to annex any territory from China! So, what is China's ultimate goal? Mere posturing is a poor fig leaf. No more red herring is working for it! The real answer is Taiwan. Its defence forces have been planning and strategising for years besides undertaking multiple naval drills closer to Taiwanese waters. Mr Xi Jinping is on steroid to realise his life-time dream of integrating Taiwan with the mainland like Hong Kong. The only bump he faces is the closer diplomatic ties between Taipei and Washington. Mr Jinping is terribly upset and perturbed by the American posturing which is thus far unmistakable and clear-eyed - Washington will defend Taiwan under all circumstances! However, Mr Jinping knows it well that with a change in the hot-seat in the White House, MAGA-obsessed new incumbent may reverse all such foreign policies of the Biden Administration!

So, The Stockholm International Peace Research Institute (SIPRI) notes that Beijing has been furiously modernising and expanding its nuclear stockpiles in the recent years. It has been erecting silos for nuclear warheads, away from its coastal cities. In the past 12 months, China has upped its arsenal from 410 warheads to 500 and eyes 1000 by 2030. Such expansion by China starkly stands out when the total number of nuclear weapons has been declining, globally, because of phasing out of Cold War-era weapons. Secondly, for the first time, China has been seen putting its warheads in a state of high operational alert. Such a behaviour is inextricably linked to war preparations and using them as mighty deterrence. Traditionally, China has been keeping 200 warheads in its arsenal but, post-Covid, it has been accelerating its production. More critically, China has been endeavouring to achieve nuclear triad capability - more nuclear submarines and injecting an airborne element besides its land-based launch capabilities. Even if the Chinese stockpiles peak to 1000 by 2030, it would be substantially less than the US arsenal of 5000 warheads, including 1800 in a ready-to-launch state, and 5600 of Russia. So, most experts believe that China is merely racing to hit the parity threshold with America. Whatever could be the motive but the tricky question is - If Russia and China together launch a future war, is America capable of dealing with two formidable fronts?

Even if one adds the stockpiles of 500 warheads of UK and France, it would be a serious gauntlet for the ill-prepared US which has also begun pumping in oodles of resources in strategic nuclear warheads. Although it is equally true that nuclear warheads are only political instruments and not 'usable in war' but such a maxim sounds hooey if one goes by the frequent use of the expression and, more worryingly, the presence of thousands of ultra-low-yield nuclear weapons which are not regulated by any global treaty and a nuclear state may not think twice to use them even prior to do-or-die situations. To impress upon China not to trigger a nuclear armament race, the US last week resumed a dialogue with Beijing but it is Track-II meeting and the outcome is that China is not keen on Track-I summit i.e. government to government talks. Let's also not forget that despite a ban on the use of chemical weapons, the Russian weapons were used by Syria and the military custodians of the planet preferred to play possum over this gory episode! The thin blue line has completely receded! So far as India goes, it needs to re-allocate its scant resources for improving and modernising its nuclear arsenal, even if it is only for military posturing or demonstrating to Mr Jinping's soaring panjandrum but the threat from China is more real than the one for Taiwan. And when the assault would be at India's territorial sovereignty, we cannot expect the US, Japan and Australia to fight our war! If I go by my strong premonitions, bad omens are piling up fast and are clearly hinting at possible conflagration of the Ukrainian War engulfing a large part of Europe! And, I am equally cocksure that China would exploit such a radioactive period of global chaos to invade Taiwan which may drag the planet towards soul-freezing third World War! Hoping against my depleting optimism, I wish that the US acts more responsibly to douse any fire which may pop up in South China Sea and even Korean Peninsula in the coming years and save the world from being caught in a 'heat dome'! Amen!


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