Summary of Direct and Indirect Tax Proposals: Budget 2024-25
Summary of the direct and indirect tax proposals made in the Budget 2024-25 (Finance Bill 2024) presented by Smt Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs:
Highlights of the Direct Tax Proposals of Finance Bill, 2024
No changes in Tax Rates
No changes have been proposed to the existing rates of direct and indirect taxes. The existing rates of income tax, gst, import duties, etc. have been retained.
To provide continuity, some tax benefits and exemptions have been extended by 1 year until 31st March 2025. These include:
- Tax benefits for startups;
- Tax exemptions on certain income for International Financial Services Centers (IFSCs); and
- Tax exemptions on investments made by sovereign wealth funds and pension funds.
The Interim Budget 2024 maintains the status quo on tax rates and extends certain tax breaks by a year to provide stability and continuity in taxation. No new changes or reforms have been introduced to the tax structure or rates.
Withdrawal of Outstanding direct tax demands
The FM has announced to withdraw the outstanding demands of income tax. Here is a summary of the key points regarding the withdrawal of outstanding direct tax demands announced in the Interim Budget 2024:
i) In line with the government’s vision to improve ease of living and doing business, outstanding petty direct tax demands up to Rs 25,000 dating back to 1962 will be withdrawn for the period up to FY 2009.
ii) Similarly, outstanding demands up to Rs 10,000 will be withdrawn for the FY 2010-11 to 2014-15.
iii) These are non-verified, non-reconciled or disputed demands that continue to remain on the books, causing anxiety for taxpayers.
- Withdrawing these demands will help provide relief to honest taxpayers and enable refunds for subsequent years.
- This is expected to benefit about 1 crore taxpayers who have such outstanding demands.
- The move aims to improve tax payer services and reduce harassment of taxpayers over small disputed sums dating back decades.
In short, the Interim Budget 2024 has announced the withdrawal of old, petty direct tax demands up to Rs 25,000 till FY 2009-10 and Rs 10,000 between FY 2010-11 to 2014-15 to provide relief to taxpayers.
Highlights of the Indirect Tax Proposals of Finance Bill 2024
The FM has proposed in Budget 2024 to retain the same tax rates in respect of GST, import duty, etc. indirect taxes as are applicable at present, i.e. existing GST and import duty rates shall continue in FY 2024-25 as well.
