Summary of Interim Union Budget 2024-25 [PART-B]

Finance Minister Nirmala Sitharaman presented the Budget 2024 i.e. Interim Budget in the parliament today. Major Steps were taken and proposals were made for the implementation by the Finance Minister in the Budget 2024.

Let’s have a look at it.

The following are the proposals and changes introduced in Union Budget 2024-25:

No change relating to taxation has been proposed in the Interim Budget. The same rates for direct taxes and indirect taxes, including import duties, have been retained.

To ensure tax continuity, some tax benefits for start-ups and investments made by sovereign wealth or pension funds, as well as tax exemptions on certain income of chosen IFC units, have been extended for one year, till March 31, 2025.

Withdrawal of Outstanding Direct Tax demands

Smt. Sitharaman made an announcement to improve tax payer services which is in line with the government’s vision to improve ease of living and ease of doing business.

There are a considerable number of petty, non-verified, non-reconciled, or disputed direct tax claims on the books, many of which date back as far as 1962, creating concern for honest taxpayers and impeding future refunds.

The Interim Budget proposes to withdraw such outstanding direct tax demands up to Rs. 25000 pertaining to the period up to financial year 2009-10 and up to Rs. 10,000 for financial years 2010-11 to 2014-15. This is expected to benefit about a crore taxpayers.

Direct Tax Collections trebled

Smt. Sitharaman thanked taxpayers for their assistance, stating that direct tax collections have more than tripled in the last ten years, while return filers have increased by 2.4 times. She emphasised that the government has decreased and rationalised tax rates, as a result of which taxpayers with incomes up to Rs. 7 lakh are exempt from paying taxes under the new regime.

She also indicated an increase in the assumed tax level for both retail firms and professions. The Minister also discussed lowering corporation tax rates for current domestic enterprises from 30% to 22% and select new manufacturing companies to 15%. In her Interim Budget speech, the Minister stated that the Government’s priority over the previous five years has been on improving tax-payer services, which has resulted in the transformation of the age-old jurisdiction-based assessment system, as well as the simplification and ease of filing tax returns.

The average processing time of returns has been reduced from 93 days in the year 2013-14 to a mere ten days this year, thereby making refunds faster, she added.

GST reduced the Compliance Burden

On indirect taxes, Smt. Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs, stated that GST has lowered the compliance burden on commerce and industry by integrating India’s widely fragmented indirect tax framework. She mentioned a recent survey performed by a renowned consulting firm, stating that 94% of sector leaders see the transition to GST as mostly beneficial. In her Interim Budget speech, the Minister noted that the GST tax base has more than doubled, and the average monthly gross GST collection has nearly doubled to Rs. 1.66 lakh crore this year.

States have also benefited. States’ SGST revenue, including compensation provided to states, has a buoyancy of 1.22 from 2017-18 to 2022-23. The Minister stated that customers are the primary benefactors because lower transportation costs and taxes have reduced the pricing of most goods and services.

Smt. Sitharaman mentioned a number of steps taken by customs to facilitate international trade, stating that import release time has decreased by 47% to 71 hours at inland container depots, 28% to 44 hours at air cargo complexes, and 27% to 85 hours at sea ports over the last four years, beginning in 2019.

Laying of White Paper

On the status of the Indian economy, the Union Minister said that in 2014 the responsibility to mend the economy step by step and to put the Governance systems in order was enormous, which she said was done by the Government successfully following its strong belief of ‘nation-first’.

She claimed that the crisis of those years had been overcome and that the economy had been firmly placed on a path of high, sustainable growth and overall development. She said that the Government will come out with a white paper, on ‘where we were then till 2014 and where we are today, exclusively for the aim of drawing lessons from the mismanagement of those years’.