FM Sitharaman Confirms no Tax Rate change in the 2024-25 budget
During the presentation of the interim Budget, Finance Minister Nirmala Sitharaman declared that there would be no alterations to the existing taxation structure, maintaining both direct and indirect tax rates, including import duties. She also highlighted a significant improvement in the refund process, with the average processing time decreasing from 93 days in 2013-2014 to a mere 10 days in the previous year. Additionally, the Finance Minister mentioned a noteworthy 50 percent rise in the average real income of the populace.
Sitharaman, however, offered some relief to taxpayers in her Interim Budget for 2024-25 by withdrawing a large swathe of outstanding petty direct tax demands. In her speech, the Finance Minister said: “There are a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, which continue to remain on the books, causing anxiety to honest taxpayers and hindering refunds of subsequent years. I propose to withdraw such outstanding direct tax demands up to twenty-five thousand rupees pertaining to the period up to financial year 2009-10 and up to ten thousand rupees for financial years 2010-11 to 2014-15. This is expected to benefit about a crore tax-payers".
In the previous Budget, Nirmala Sitharaman had unveiled five significant changes in personal income tax aimed at providing advantages to the middle class. She emphasized that the default tax regime would be the new one, but taxpayers had the option to choose the old regime if they preferred. Sitharaman recommended an increase in the rebate threshold from Rs 5 lakh to Rs 7 lakh in the new tax structure. Consequently, individuals opting for the new regime would be exempt from paying any tax on annual incomes up to Rs 7 lakh.
In the past, interim Budgets have not accounted for major changes. In 2019, then Finance Minister Piyush Goyal proposed a hike in the standard deduction and the threshold for tax deducted at source, along with sops to farmers and pension cover for unorganized sector workers. Five years earlier in 2014, the interim Budget presented by P Chidambaram had announced a cut in excise duties for small cars, motorcycles, scooters and SUVs besides large and mid-segment cars, and tax relief for mobile handsets. The Budget session of Parliament kicked off on January 31 and will continue till February 9. The Lok Sabha elections are expected to be held around April-May, following which the elected government is likely to present the full Budget in July.
