New Delhi| Jan, 2: There will be no change to income tax slabs, which have been reduced and rationalised, in the 2024 interim Budget, Union Finance Minister Nirmala Sitharaman said Thursday as she read out a statement of the country’s finances in a special session of Parliament.
The Finance Minister said “I propose to retain the same tax rates for direct and indirect taxes, including import duties.” She did, though, propose to withdraw outstanding direct tax demands of up to ₹ 25,000 till FY09/10 and up to ₹ 10,000 for FY10/11 to 14/15, and said it would benefit around one crore taxpayers. On that count, Nirmala Sitharaman said, “… there are a large number of petty, non-verified, non-reconciled, or disputed, direct tax demands, many dating to 1962, which remain on the books, causing anxiety to honest taxpayers… I propose to withdraw such outstanding direct tax demands.” On the overall tax picture, the Finance Minister said direct collections had more than trebled in the past 10 years, and the number of people filing returns had increased 2.4 times. The hold on revisions to tax slabs was not unexpected given this is an interim budget – essentially to keep the government running till a new administration is elected and takes charge later this year. A full Union Budget will likely be presented in July. Nevertheless, that tax slabs will stay the same will disappoint salaried taxpayers, particularly in the middle class, which had been hoping for cuts to help deal with perennial cost-of-living concerns. However, a significant point for taxpayers is that, as of now, both the old and new tax regimes will continue, meaning people can choose between them when filing their returns. Nirmala Sitharaman also touched on the introduction of new forms and software to make filing easier and simpler. The average processing time of tax returns have been reduced from 93 days in 2014 to just 10 days this year, thereby making refunds faster, she said.
Viksit Bharat: Presenting her sixth straight (but first interim) budget, Nirmala Sitharaman also said Prime Minister Narendra Modi’s government is working to make India a ‘Viksit (Developed) Bharat’ by 2047, and that this development would be “all round, all inclusive, and all pervasive”. “Our vision for Viksit Bharat is that of a prosperous Bharat… in harmony with nature and modern infrastructure, and providing opportunities for all to reach their potential. The next five years will see unprecedented development and golden moments to realise the goal of a developed India…” Nirmala Sitharaman said the government plans to form a “high-powered committee” for an “extensive consideration of challenges arising from fast population growth and demographic challenges”. “The committee will be mandated to make recommendations to address these challenges comprehensively, in relation to the goal of ‘Viksit Bharat’,” she explained. Specifically, Nirmala Sitharaman spoke about the government’s focus on four categories of society – the poor, women, young men and women, and farmers. The Modi government’s focus on women and women-led development, its Nari Shakti motto, is widely expected to be a major election plank. FDI, Or ‘First Develop India’: Nirmala Sitharaman said FDI (foreign direct investment) inflow between 2014 and 2023 had marked a “golden era”. The sum of $596 billion was twice that between 2005 and 2014, she said. To encourage sustained foreign investment, the government is negotiating bilateral investment treaties with our foreign partners in the spirit of FDI, or ‘First Develop India’, she said.
Global Challenges: The Finance Minister also spoke about the global context of development, acknowledging that increasingly fragile geopolitical situations across the world – such as wars in Ukraine and Gaza, and tension in the Middle East, as well as the spectre of terrorism – had created new challenges. Despite these challenges, Ms Sitharaman hailed the Modi government for delivering high growth and ensuring it maintains its “exemplary track record of Governance, Development, and Performance”. “Our government has provided transparent, accountable, and people-centric, trust-based administration, with citizen-first, minimum-government, and maximum-governance mode.”
