Budget 2024: No change in taxation proposed by Nirmala Sitharaman

Finance Minister Nirmala Sitharaman presented her sixth Budget as the finance minister and last in the second term of the Modi government on Thursday.

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Courtesy: ANI

As anticipated and to the public' relief, the central government did not make any changes to or increase the tax burden on citizens in the 2024–25 interim budget that Union Finance Minister Nirmala Sitharaman presented.

Sitharaman during her Budget speech said, "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.”

Slabs of New Income Tax regime:

  • No tax for income up to Rs 3 lakh
  • 5% tax (tax rebate under Section 87A available) for income between Rs 3–6 lakh
  • 10% tax (tax rebate under Section 87A up to Rs 7 lakh available) for income between Rs 6–9 lakh
  • 15% tax for Income between Rs 9–12 lakh
  • 20% tax for Income between Rs 12–15 lakh
  • Income of Rs 15 lakh and above will be taxed at 30%

Nonetheless, starting in March 2024, some tax breaks for investments made by sovereign wealth or pension funds, as well as tax exemptions on specific revenue of some IFSC units, would end. She suggested delaying the date by one more year in order to maintain consistency in the tax system.

Furthermore, in keeping with the administration's goal of facilitating business transactions and improving living standards, she declared plans to enhance tax payer services.

"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," she said.

She proposed to withdraw such outstanding direct tax demands up to Rs 25,000 for 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 tax-payers," she added.

In addition to this, Sitharaman on Thursday pegged the fiscal deficit target for 2024-25 at 5.1 per cent of gross domestic product (GDP).
In 2023-24, the government pegged the fiscal deficit target for 2023-24 at 5.9 per cent of gross domestic product (GDP). Today, Sitharaman said that the fiscal deficit of 2023-24 was downwardly revised to 5.8 per cent.

Fiscal deficit target pegged at 5.1%

Presenting the Union Budget 2023, Sitharaman on Thursday pegged the fiscal deficit target for 2024-25 at 5.1 per cent of gross domestic product (GDP).

The administration set a target for the budget deficit in 2023–2024 of 5.9 percent of GDP. According to Sitharaman's statement today, the fiscal deficit for 2023–2024 has been reduced down to 5.8%.

India's economy expanded by 7.2% in 2022–2023 and 8.7% in 2021–2022. For the current fiscal year 2023–2024, the Indian economy is predicted to expand by 7.3%, continuing to be the fastest-growing major economy.