Income Tax Slab 2024-25: Tax rates to remain same, says Nirmala Sitharaman in interim Budget, but offers a small relief to some | Business News

Income Tax Slab 2024-25: Tax rates to remain same, says Nirmala Sitharaman in interim Budget, but offers a small relief to some | Business News


Income Tax Slabs 2024-25, Budget News: Union Finance Minister Nirmala Sitharaman, while presenting the interim Budget on Thursday, said that there would be no changes to taxation and proposed to retain same direct and indirect tax rates, including import duties. The Union Finance Minister further stated that the average time for refunds has been reduced from 93 days in 2013-2014 to just 10 days in the last year. She added that the average real income of people has increased by 50%.

Sitharaman, however, offered some relief to tax payers 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 tax payers and hindering refunds of subsequent years. 
I propose to withdraw such outstanding direct tax demands up to twenty-five thousand rupees (₹ 25,000) pertaining to the period up to financial year 2009-10 and up to ten-thousand rupees (₹ 10,000) for financial years 2010-11 to 2014-15. This is expected to benefit about a crore tax-payers.”

Sanjiv Malhotra, Senior Advisor, Shardul Amarchand Mangaldas & Co said on the Direct Tax front “extension of the sunset clause for IFSC and start-ups was expected and delivered by the finance minister. I don’t understand the rationale of not extending the sunset clause (March 31, 2024) for new manufacturing units under section 115BAB. This seems contrary to the policy of the Government to promote manufacturing in India under the PLI scheme. I do hope that this is an error of omission, and we will see a notification to extend this benefit soon.” He said the lack of change in tax rates is consistent with the stated policy of the Government of having a stable tax regime. “The salaried class will expect more concessions in the full budget later this year.”

Malhotra said the move to extend the timelines for transfer pricing assessments, and proceedings before dispute resolution panel and tax tribunals to March 31, 2025 is a “pragmatic step because it is better to give adequate time to the relevant authorities to examine the pending matters in-depth”. He added that the current workload on tax disputes is extremely high and lack of time, does impact the quality of orders being passed. “Also, the proposal to withdraw low value tax matters (upto INR 25,000) for pertaining to FY 2010 and matters with tax demand upto Rs 10,000 for FY 2011 to FY 2015, should help authorities create more bandwidth and focus on matters involving material tax amounts.”

Nirmala Sitharaman, during the last Budget, had made five major announcements on personal income tax to benefit the middle class. She also said that while the new tax regime would be the default, tax payers could opt for the old one. Sitharaman proposed to raise the rebate limit from Rs 5 lakh to Rs 7 lakh in the new tax regime. Therefore, if an individual has opted for the new tax regime, he or she will not be required to pay any tax up to an annual income of Rs 7 lakh.

Festive offer

In the past, interim Budgets have not accounted for major changes. In 2019, the then Finance Minister Piyush Goyal had proposed a hike in standard deduction and the threshold for tax deducted at source, along with sops to farmers and pension cover for unorganised 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.


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