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Business News/ Money / Personal Finance/  Budget 2024: FM Sitharaman announces removal of direct tax demands, faster processing time. Details here
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Budget 2024: FM Sitharaman announces removal of direct tax demands, faster processing time. Details here

The Interim Budget maintains existing rates for direct and indirect taxes. Outstanding direct tax demands up to ₹25,000 for the period until FY 2009-10 and up to ₹10,000 for financial years 2010-11 to 2014-15 are eliminated. The average processing time for tax returns has dropped to 10 days.

Finance Minister Nirmala Sitharaman announced the Interim Budget for 2024 on February 1. (PTI)Premium
Finance Minister Nirmala Sitharaman announced the Interim Budget for 2024 on February 1. (PTI)

The central government has declared that there will be no alterations to income tax slabs or other significant taxes in the forthcoming financial year. While presenting the vote-on-account Budget for 2024 on February 1, Finance Minister Nirmala Sitharaman stated that the existing income tax slabs, implemented in the preceding budget, will persist. This implies that the current income tax slabs and rates, applicable for the financial year 2023-24, will extend into the forthcoming year. 

In her Budget speech, Finance Minister Nirmala Sitharaman also revealed that there would be no substantial alterations to import duties compared to the preceding year. Furthermore, she introduced a scheme to alleviate minor income tax demands.

Reading out her Interim Budget speech, FM Sitharaman said, “I wish to make an announcement to improve taxpayer 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 on the books, causing anxiety to honest taxpayers and hindering refunds of subsequent years. I propose to withdraw such outstanding direct tax demands up to 25,000 pertaining to the period up to financial year 2009-10 and up to 10,000 for financial years 2010-11 to 2014-15. This is expected to benefit about a crore taxpayers."

Pramod Kathuria, Founder and CEO, Easiloan explained, “In the interim budget, the government maintained existing income tax slabs without major changes. The default option is now the new tax regime introduced last year, with the old regime remaining available for those who prefer it. Despite expectations, there were no significant announcements regarding tax deductions or exemptions."

The elimination of pending tax demands for the mentioned years is intended to alleviate the financial burden on individuals who have been struggling with these obligations, Kathuria added. 

Sujit Bangar, Founder, Taxbuddy.com said, “The most comforting announcement is about the scrapping of petty income tax disputed demands outstanding for many years. This announcement is in line with the government's earlier initiatives to reduce litigation. Tax rates and regimes have remained unchanged, with no proposed changes in personal taxation. This might be a little disheartening for those expecting a few such announcements."

The government also announced measures to alleviate tax burdens and streamline administration. The proposal includes waiving outstanding direct tax demands up to 25,000 for fiscal years up to 2009-10 and up to 10,000 for 2010-11 to 2014-15, benefitting approximately 1 crore taxpayers. This move aims to simplify tax administration."

The finance minister further noted that the current income tax rates are already at a low level. Additionally, she highlighted a significant improvement in the average processing time for tax returns, which has decreased from 93 days in the 2013-14 fiscal year to just 10 days this year, resulting in faster refunds.

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Published: 01 Feb 2024, 01:55 PM IST
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