Budget 2024: Because this was a ‘vote on account’, the FM recommended maintaining the same tax rates for direct and indirect taxes, including import charges.
During the Budget release for fiscal year 2024, Finance Minister Nirmala Sitharaman abstained from introducing changes to the current income tax scheme. As this was a ‘vote on account’, the FM advocated keeping the current tax rates for direct and indirect taxes, including import charges.
Here’s what changes and what stays the same on the income tax front:
Income tax rates remain unchanged
The present income tax rates, like in previous Budgets, are unchanged. The previous year’s Budget made significant adjustments to the income tax bands under the new tax framework. The new income tax regime exempts anyone earning up to ₹3 lakh per year from paying taxes.
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The tax rate is 5% for income between ₹3 lakh and ₹6 lakh, 10% for income between ₹6 lakh and ₹9 lakh, 15% for income between ₹9 lakh and ₹12 lakh, 20% for income between ₹12 lakh and ₹15 lakh, and 30% for income beyond ₹15 lakh. Previously, individuals earning up to ₹2.5 lakh were exempt from income tax. Income between ₹2.5 lakh and ₹5 lakh is subject to a 5% tax rate.Individuals earning up to ₹5 lakh can claim a ₹12,500 rebate under Section 87A of the Income Tax (I-T) Act.
Tax benefits for start-ups and investments by sovereign wealth or pension funds extended till March 2025
Finance Minister Nirmala Sitharaman announced the extension of tax breaks for start-ups and investments made by sovereign wealth or pension funds, in accordance with the government’s goal of promoting ease of living and doing business. The present benefits, which were slated to expire on March 31, 2024, have been extended until March 31, 2025. FM stated that the goal of this action is to provide firms in these areas with tax consistency and continuity.
Tax exemption for some IFSC units extended to March 2025
The Financial Services Centres Authority (IFSCA) in GIFT City, Gandhinagar, is an important player in the financial sector. The budget release includes a continuation of tax benefits for IFSCA firms until March 2025.
This includes offshore derivative contracts issued by foreign portfolio investors (FPI) in GIFT City, which will benefit the Indian units of foreign banks in the region.
Direct tax demands of up to ₹25,000 in FY10 and ₹10,000 in FY11-FY15 have been withdrawn.
Recognising the burden of pending direct tax demands on taxpayers, the Finance Minister recommended a substantial relief measure. Direct tax claims of ₹25,000 for 2009–10 and ₹10,000 for 2010–11 to 2014–15 would be withdrawn. This initiative is likely to benefit around 1 crore taxpayers by giving relief and resolving long-standing issues.
No changes in the corporate tax rate
The budget kept the corporate tax rate at 22% for current domestic enterprises. Certain new manufacturing enterprises pay a lower corporate tax rate of 15%.
FAQs
Is there any change in tax slab in Budget 2024?
Budget 2024 Income Tax Live: Changes in income tax slabs for 2024-2025 Finance Minister Nirmala Sitharaman’s Interim Budget 2024 speech disappointed the common man and middle class salaried taxpayers by not announcing any modifications in income tax slabs or rates for the fiscal year 2024-25.
What are the highlights of Budget 2024?
Budget 2024 Key Highlights LIVE: Macroeconomic takeaways from Interim Budget
- FY25 fiscal deficit target at 5.1% of GDP.
- FY24 fiscal deficit is seen at 5.8% of GDP.
- Govt aims to reduce fiscal deficit to below 4.5% by FY26.
- FY25 Capex outlay at 3.4% of GDP.
- FY25 Net market borrowing seen at ₹11.75 lakh crore.
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