The Interim Union Budget 2024-25: A Comprehensive Roadmap for Societal Issues and Economic Growth
The Interim Union Budget for the fiscal year 2024-25 outlines a thorough plan to address crucial societal concerns and propel economic growth. Part A of the budget places emphasis on social justice, ‘Garib Kalyan,’ the welfare of farmers, empowerment of women (Nari Shakti), and the implementation of various development schemes. In Part B, the spotlight shifts to direct and indirect taxes, Goods and Services Tax (GST), accomplishments in tax reforms, and the overall economic landscape. Here are the key highlights of the budget in part B specially Income Tax and Goods & Service Tax :”
1.Income Tax – Major Highlights
• In the recent announcement by the finance minister (FM), it has been disclosed that the current tax rates for direct taxes will be maintained for the fiscal year 2024-25. Individuals with an income of up to Rs. 7 lakh will not incur any tax liability under the new tax regime.
• For corporate taxes, existing domestic companies will continue to be taxed at a rate of 22%, while certain new manufacturing companies will benefit from a reduced tax rate of 15%.
• The FM highlighted a significant increase in direct tax collections, which have more than tripled in the past decade. The number of return filers has also seen a substantial growth, reaching 2.4 times the previous figures.
• On the efficiency front, there has been a remarkable improvement in the processing time of tax returns. The average processing time has decreased from 93 days in 2013-14 to an impressive 10 days in the fiscal year 2023-24.
• In terms of policy proposals, the FM has recommended an extension of the time limit for specific tax benefits targeting start-ups and investments by sovereign wealth funds/pension funds. Additionally, there is a proposal for the extension of tax exemption for specific units in the International Financial Services Centre (IFSC), which was initially set to expire on March 31, 2024. This exemption has now been prolonged until March 31, 2025.
Government to improve tax payer services
1. Outstanding direct tax demands upto Rs 25000 pertaining to the period upto FY 2009-10 withdrawn
2. Outstanding direct tax demands upto Rs 10000 for financial years 2010-11 to 2014-15 withdrawn
3. Presumptive taxation threshold for retail businesses increased to Rs 3 crore from Rs 2 crore. Presumptive taxation threshold for professionals increased to Rs 75 lakh from Rs 50 lakh
Achievements in tax-payer services
1. Average processing time of tax returns has reduced to 10 days from 93 days in 2013-14
2. Faceless Assessment and Appeal introduced for greater efficiency
3. Updated income tax returns, new form 26AS and prefilled tax returns for simplified return filing
2. Goods & Service Tax – Major Highlights
1. FM proposes to retain same tax rates for indirect taxes.
2. GST unified the highly fragmented indirect tax regime in India
3. Average monthly gross GST collection doubled to Rs 1.66 lakh crore this year
4. GST tax base has doubled
5. State SGST revenue buoyancy (including compensation released to states) increased to 1.22 in post-GST period (2017-18 to 2022-23) from 0.72 in the pre-GST period (2012-13 to 2015-16)
6. 94% of industry leaders view transition to GST as largely positive
7. GST led to supply chain optimization
8. GST reduced the compliance burden on trade and industry Lower logistics cost and taxes helped reduce prices of goods and services, benefiting the consumers
Source : Internet
