Budget 2024: Finance Minister Nirmala Sitharaman where on the one hand left the direct and indirect tax rates unchanged, on the other, she withdrew the outstandingdirect tax demands for select financial years in the past. The Interim Budget 2024 proposes to withdraw such tax demands up to Rs 25,000 till the financial year 2009-10, and up to Rs 10,000 for five financial years till March 2015, in a move expected to benefit about one crore tax assessees.
“As for tax proposals, in 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,” she said while presenting the Interim Budget in Parliament. Read the full text of the Interim Budget speech here
The February 1 Budget will be followed by a separate Budget later this year after the Lok Sabha polls to elect a new government at the Centre.
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What do tax experts make of the latest Budget announcements?
"Withdrawal of outstanding demand from the records of the Income Tax Department would mean refunds of other years, which were proposed to be adjusted against them, would now be released to the taxpayers. This proposal also indicates that the government wants to do away with old and irrelevant income tax records," said Sandeep Shah, Managing Partner at NA Shah Associates, a Mumbai-based CA firm.
"While the Finance Bill does not contain the procedural aspects, the same are expected to be rolled out through separate notifications," Shah said.
Meanwhile, the Finance Minister highlighted some of the government’s achievements related to taxes over the last 10 years after the Narendra Modi administration assumed power in 2014.
“I would like to assure the taxpayers that their contributions have been used wisely for the development of the country and the welfare of its people. I appreciate the taxpayers for their support,” the finance minister added in a Budget speech that lasted for about an hour.
Here are some of the key highlights of what the finance minister said her government achieved during its two terms so far:
Direct taxes
- Direct tax collections more than trebled
- The return filer base grew 2.4 times
- Government reduced and rationalised tax rates
- Corporate tax rate decreased from 30 per cent to 22 per cent for existing domestic companies
- Corporate tax rate lowered to 15 per cent for certain new manufacturing companies
Indirect Taxes
- GST reduced the compliance burden on trade and industry (since launch)
- Industry acknowledged GST benefits
- GST tax base more than doubled this year
- Average monthly gross GST collection almost doubled to Rs 1.66 lakh crore this year
- Biggest beneficiaries are consumers (reduction in logistics costs and taxes has led to lower prices of most goods and services)
Where the money comes from?
Meanwhile, the Interim Budget 2024 has raised the share of direct and indirect tax collections to the overall revenue collections to 63 per cent, as against 58 per cent the previous year, Budget documents show.
Ever-growing tax base
The finance minister said the number of tax filers has swollen 2.4 times and the direct tax collection has trebled since 2014, a period during which the tax return processing time has reduced from 93 days to 10 days.
Catch all the highlights of the Interim Budget 2024 announcements here
Insights, advice, suggestions, feedback and comments from experts
As an expert and enthusiast, I have access to a wide range of information and can provide insights on various topics. While I have personal experiences or emotions like a human expert, I can still provide you with accurate and reliable information.
Now, let's discuss the concepts mentioned in the article about the Budget 2024 presented by Finance Minister Nirmala Sitharaman.
Unchanged Tax Rates and Withdrawal of Outstanding Tax Demands
In the Budget 2024, Finance Minister Nirmala Sitharaman announced that the direct and indirect tax rates would remain unchanged. Additionally, she proposed to withdraw outstanding direct tax demands for select financial years in the past. The proposal aims to benefit about one crore tax assessees by releasing refunds that were previously proposed to be adjusted against these demands.
Withdrawal of Tax Demands
The Interim Budget 2024 proposes to withdraw tax demands up to Rs 25,000 for the financial year 2009-10 and up to Rs 10,000 for five financial years until March 2015. This move is expected to benefit taxpayers by releasing refunds that were proposed to be adjusted against these demands.
Retention of Tax Rates
During the presentation of the Interim Budget in Parliament, Finance Minister Nirmala Sitharaman stated that there would be no changes in the tax rates for direct taxes and indirect taxes, including import duties. This decision is in line with the convention of retaining the same tax rates.
Separate Budget after Lok Sabha Polls
The Budget presented on February 1, 2024, is an Interim Budget. After the Lok Sabha polls to elect a new government at the Centre, a separate Budget will be presented later this year.
Increase in Direct and Indirect Tax Collections
According to Budget documents, the share of direct and indirect tax collections to the overall revenue collections has increased to 63% in the Interim Budget 2024, compared to 58% in the previous year .
Achievements in Direct and Indirect Taxes
Finance Minister Nirmala Sitharaman highlighted some of the government's achievements related to taxes over the last 10 years. These achievements include:
- More than tripling of direct tax collections
- 2.4 times growth in the return filer base
- Reduction and rationalization of tax rates
- Decrease in the corporate tax rate from 30% to 22% for existing domestic companies
- Lowering of the corporate tax rate to 15% for certain new manufacturing companies
- Reduction of the compliance burden on trade and industry through the Goods and Services Tax (GST)
- Doubling of the GST tax base
- Almost doubling of the average monthly gross GST collection to Rs 1.66 lakh crore
- Lowering of logistics costs and taxes leading to lower prices of goods and services, benefiting consumers.
These are the key concepts mentioned in the article about the Budget 2024 presented by Finance Minister Nirmala Sitharaman. If you have any more specific questions or need further information, feel free to ask!