Tax Implication of Budget 2024: What You Need to Know
Exploring Tax Implications of Budget 2024: A Comprehensive Review
The Interim Budget 2024, presented by Finance Minister Nirmala Sitharaman on 1 February 2024, was a budget for the present and the future. It was a budget that aimed to revive the growth momentum, boost the investment climate, balance the fiscal consolidation and stimulus measures, reform the tax system, promote the digital transformation and innovation, enhance the social sector spending and welfare schemes, and foster the inclusive and sustainable development of the country.
Understanding the Tax Changes in Budget 2024
No tax liability for income up to Rs 7 lakh
The Interim Budget 2024 did not change the income tax slabs or rates, but it increased the rebate under section 87A of the Income Tax Act, 1961, from Rs 2,500 to Rs 12,500. This means that the taxpayers having a taxable income up to Rs 5 lakh will not have to pay any income tax. Moreover, if the taxpayers invest in the tax-saving instruments under section 80C, such as Provident Fund, Public Provident Fund, National Savings Certificate, etc., they can reduce their taxable income by another Rs 1.5 lakh, and thus enjoy tax-free income up to Rs 6.5 lakh. Additionally, if the taxpayers invest in the National Pension System (NPS) under section 80CCD(1B), they can claim an extra deduction of Rs 50,000, and thus have no tax liability for income up to Rs 7 lakh. This will benefit nearly one crore taxpayers, especially the middle class and the salaried taxpayers.
No recovery of old and disputed direct taxes up to Rs 25,000
The Interim Budget 2024 announced that the government will not pursue the recovery of old and disputed direct taxes up to Rs 25,000 until the financial year 2009-10. This will provide relief to the taxpayers who are facing litigation and harassment for the pending tax demands. This will also help the government to clear the backlog of tax cases and reduce the litigation cost and time. This will benefit about 1.5 crore taxpayers, mostly the small and medium taxpayers.
Faster processing of tax refunds
The Interim Budget 2024 announced that the government will process the tax refunds within 24 hours and issue them electronically. This will improve the cash flow and liquidity of the taxpayers and the businesses. This will also enhance the efficiency and transparency of the tax administration and reduce the grievances and complaints of the taxpayers. This will benefit all the taxpayers who are eligible for tax refunds, especially the exporters and the startups.
Robust tax collection machinery
The Interim Budget 2024 announced that the government will implement various measures to strengthen the tax collection machinery and increase the tax compliance and collection. Some of the measures are:
Integration of the GST system with the customs system to prevent tax evasion and frauds in the cross-border transactions.
Implementation of the e-assessment scheme to eliminate the human interface and discretion in the tax assessment and scrutiny.
Expansion of the information captured through the Annual Information Statement (AIS) to include the details of the income, expenditure, assets, liabilities, etc. of the taxpayers.
Introduction of the pre-filled income tax returns based on the information available from various sources, such as banks, employers, mutual funds, etc.
Simplification and rationalization of the tax laws and procedures to reduce the complexity and ambiguity for the taxpayers and the businesses
The Interim Budget 2024 was a budget that focused on the new income tax regime, which was introduced in the last year’s budget. The new income tax regime offers lower tax rates up to an income threshold of Rs 15 lakh, but does not allow for some major tax exemptions and deductions that are available in the old tax regime. The new income tax regime is now the default income tax regime and the taxpayers have to make a conscious choice to opt for the old tax regime at the time of filing their income tax returns. The Interim Budget 2024 did not make any changes in the new income tax regime, but it is expected that the full-fledged budget, which will be presented after the general elections, may include some popular deductions and exemptions in the new income tax regime, such as the deduction for NPS investment, the exemption for house rent allowance, etc.
Conclusion
The Interim Budget 2024 was a budget that had significant implications for various stakeholders, such as the common citizens, the businesses, the investors, the states, and the international community. It was a budget that reflected the priorities and values of the nation, as well as the challenges and opportunities of the world.
If you want to know more about the tax implication of the Interim Budget 2024, you can visit our website or contact us at 9974037317. We are Dexter Consultancy Vadodara, a leading tax consultancy firm that can help you with your tax-related issues and queries. We have a team of qualified and experienced consultants who can provide you with the best solutions for your tax needs. We offer a wide range of services, such as income tax filing, GST registration and return, company registration, accounting, auditing, and trademark registration. Contact us today and let us be your trusted partner for your tax solutions.
