No concessions for you and me but expectations remain high

The finance minister stuck to a 'vote on account' budget despite expectations of a populist budget in an election year. However, she did use the occasion to showcase the multiple achievements of the government in the last decade in her almost an hour-long budget speech.

Despite the disappointment for not getting any tax concessions, yet, one has to give it to Nirmala Sitharaman that she successfully managed to create a sense of pride and hope in the common man. She passionately and eloquently spoke about inclusive development and growth, social justice, focus on prioritizing the needs, aspirations and welfare of the ‘garib’ (poor), ‘mahilayen’ (women), ‘yuva’ (youth) and ‘annadata’ (farmer), and multipronged economic management over the last decade, and articulated the strategy of the government for ‘Amrit Kaal’ to make a ‘Viksit Bharat’ by 2047.

Personally, it was heartening to hear about the focus on ‘Nari Shakti’ through entrepreneurship, ease of living, and dignity through guaranteed participation in government schemes such as Mudra Yojana, PM Awas Yojana and higher education particularly STEM courses, and various other measures to promote participation of women in workforce. We hope to show the way to the world the difference that women can make to the economy of the country.

In the interim budget for 2024 presented on Thursday, the FM has proposed no change in tax rates for direct taxes and indirect taxes including import duties. She spoke about the tax reforms that have helped treble direct tax collections and also widened the tax base significantly. She also appreciated the taxpayers and assured them that their contributions have been used wisely for the development of the country and welfare of its people.

The FM reiterated the tax reforms in the last decade. Currently, there is no tax liability if the total income is up to ₹7 lakh under new tax regime, whereas under old tax regime, there is no tax liability if the total income is up to ₹5 lakh.

In line with the government’s vision to improve ease of living and ease of doing business, and to improve taxpayer services, the FM has proposed to withdraw outstanding direct tax demands up to ₹25,000 up to FY2009-10 and up to ₹10,000 for the FY2010-11 to FY2014-15. The details of this proposal are yet to be released. This significant step in dispute resolution when implemented will benefit about 10 million taxpayers and help get their refunds of subsequent years which are stuck due to the outstanding tax demands of other years.

The Finance Bill 2024 has also codified the press release and circular issued in 2023 on changes made to the applicable rates of TCS on overseas remittances. There is no new change in TCS rates and threshold on overseas remittances.

The FM has proposed to extend certain tax benefits to start-ups and investments made by sovereign wealth or pension funds as also tax exemption on certain income of some IFSC units which were expiring on 31 March 2024 to 31 March 2025.

The FM also proposed to increase the time limit for the government to notify a scheme for faceless appeals before the Income-tax Appellate Tribunal up to 31 March 2025.

Now, its over to the full budget 2024 to be presented by the new government to meet the expectations of common man for tax rates reduction and increase in personal disposable income.

Sonu Iyer is partner at People Advisory Services (Tax), EY India.