Union Budget 2024:
In the new union budget speech, 2024 Finance Minister Nirmala Sitharaman kept Income tax rates unaltered in the interim budget. It’s been a disappointment for middle-class taxpayers who have been looking for additional benefits in the new Tax regime.
The finance minister kept the tax rates unchanged for export duties and other indirect taxes. FM Sitharaman said, “Regarding Tax proposals, I plan to keep things unchanged to the tax rates for both direct and indirect taxes, including import duties.”
FM Sitharaman admired income taxpayers in her Union Budget 2024 speech and revealed the changes brought about in the new income tax regime last year.
FM Sitharaman cited, that the average time for refunds has been reduced from 93 days in 2013 -14 to just 10 days in last year 2023.
Reform of taxes made by NDA government FM Sitharaman said” The Government has reduced and justified tax rates. Under the new tax scheme with income up to Rs 7lakh, up from Rs 2.2 lakh, there is now no tax liability for taxpayers from the financial year 2013-14. The threshold for speculative taxation for retail businesses went up from Rs 2 crore to Rs 3 crore. Similarly, the minimum income limit for professionals for estimated taxation was raised from Rs 50 lakh to Rs 75 lakh. Corporate tax was reduced to 22% from 30% for existing domestic companies and a 15% reduction for certain new manufacturing companies.”
Outstanding Tax Demands
To those who owe taxes giving them relief FM Sitharaman said, ”With the government’s vision to enhance ease of living and ease of doing business, I wish to announce to improve taxpayers 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 in books, causing apprehension to honest taxpayers and impeding refunds of subsequent years. I propose to withdraw such outstanding direct demands up to Rs 25000 for the period up to the financial year 2009-2010 and up to Rs 10,000 for the financial year 2010-2011 to 2014-2015. This is expected to benefit about 1 crore taxpayers.
Existing Tax Slabs under the New and Old Tax Regime
Old Tax Regime
The old tax regime has many ways to reduce taxes and deductions for individuals. Some frequently claimed exemptions include house rent allowance (HRA) leave travel allowance (LTA) deduction under sections 80C, 80D, 80CCD (1b), 80CCD (2), and others.
- Up to Rs 2.5Lakh – NIL
- Rs 2.5 lakh to Rs 5 lakh – 5%
- Rs 5 lakh to Rs 10 lakh – 20%
- Rs 10 lakh – 30%
New Tax Regime
The Old Tax regime exemptions and deductions are not available in the New Tax regime. Under the old regime if the taxable income after all deductions is below Rs 5 lakh then the individual doesn’t need to pay any tax but under the new tax regime, the entire income will be tax-free if the taxable income is under Rs 7 lakh.
- Income up to Rs 3 lakh – No Tax slab
- Income of more than 3 lakh up to Rs 6 lakh – 5%
- Income of more than Rs 6 lakh up to Rs 9 lakh – 15%
- Income of more than RS 12 lakh up to 15 lakh – 20%
- Income of above Rs 15 lakh – 30%
Reactions to Budget 2024
Divam Sharma, founder and fund manager at Green Portfolio PMS said, “No changes in the taxes are astonishing because people have experienced losses in the earnings they could spend and this declaration might have made them feel better. We are experiencing different forms of government in India which is positive for the long term.”
“We will have to wait for the full budget for any changes as today there has been no change on the taxation front, with the government sticking to the standard of not making major announcements in the union budget 2024.