Income Tax Budget 2024: In the Budget, one of the things that the middle class eagerly anticipates is the Finance Minister (FM) playing Santa by lowering tax rates. However, during the presentation of the interim Budget 2024 on Thursday, FM Nirmala Sitharaman announced that the tax slabs would remain unchanged for both the new and old tax regimes. "Keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties," Sitharaman said in her Budget speech.
Abhishek Soni, CEO, Tax2Win, an Income Tax portal said, “In today's budget announcement, taxpayers were eagerly anticipating a reduction in tax rates, an increase in the basic exemption limit, and enhanced deduction limits to optimize their tax savings. However, the FM opted to maintain the existing tax rates, attributing the decision to the pressing need to reduce the fiscal deficit.”
“It is crucial to note that the government had already introduced significant tax benefits in the previous budget, including an expansion of the rebate limit, ensuring that individuals with an income up to Rs 7 lakh are exempt from taxes. This move was a substantial relief for a considerable portion of the population,” he added.
“Furthermore, given that today's budget is an interim one, the FM emphasized that the primary focus is on addressing the fiscal deficit rather than introducing sweeping changes to the tax structure. The anticipation is now directed towards the main budget, scheduled to be presented after the Lok Sabha election in July 2024,” Soni added.
According to Suneel Dasari, founder and CEO of EZTax, it is prudent for the FM to refrain from modifying the tax slabs and rates. It demonstrates assurance in the Indian economy and the course already established. “To begin with, the fiscal year 2023-24 budget provides significant relief to the majority of taxpayers by eliminating any effective tax on incomes below Rs 7 lakh. Furthermore, the budget had an impact on both the convenience of conducting business and ensuring tax compliance. In general, as an interim (vote-on-account) budget, it should not contain any decision that affects the upcoming mandate,” he added.
In the interim budget 2024-25, Finance Minister Nirmala Sitharaman announced a significant relief for taxpayers embroiled in tax disputes. These disputes, some dating back to the year 1962, have left a considerable number of pending cases yet to be resolved. While the number of pending dispute cases is not mentioned, there are quite a huge number of petty cases still pending. To remove the anxiety honest taxpayers face due to it, Sitharaman proposed to withdraw outstanding tax demands up to Rs 25,000 for disputed tax cases ‘pertaining to the period up to the financial year 2009-10’ and up to Rs 10,000 'from the financial year 2010-11 to the financial year 2014-15'.