Personal tax announcement in the 2024 interim budget: everything you need to know

Finance Minister Nirmala Sitharaman presented the sixth consecutive Union Budget. In this pre-election budget, although the government did not announce any major populist measures, the finance minister provided some personal tax relief for individuals and start-ups. Here are the personal tax announcements from the 2024-25 Interim Budget:

No change in personal tax rates

Suresh Surana, founder, RSM India, said: “As per past parliamentary practice, the interim budget does not propose any major structural changes in tax rates and remains consistent with last year. Under the new system, the total revenue will not Persons exceeding Rs 7 lakh shall be liable to zero tax.”

Health and Education Levy @4% is levied on the total amount of tax and surcharge.

A tax rebate of Rs 12,500 is available under the old tax regime with a total income up to Rs 5,00,000, and a tax rebate of Rs 25,000 under the new tax regime is provided under the new tax regime with a total income up to Rs 7,00,000. Under the new tax regime, marginal tax relief is available for income above Rs 700,000.

Capital gains tax and dividend tax surcharges remain unchanged at 15%.

Drop old trivial tax requirements

“The proposal to waive unreconciled old unpaid taxes in the 2024 Interim Budget is in line with the government’s vision to improve ease of living and ease of doing business. There are a large number of trivial, unverified, uncoordinated or controversial direct taxes Demands, many of which date back to 1962, continue to remain on the books, causing undue hardship, administrative difficulties and impeding refunds in subsequent years,” Surana said.

The proposal is to withdraw such unpaid direct tax claims up to Rs. 25,000 relating to the financial year 2009-10, subject to a maximum of Rs. 10,000 for the financial year 2010-11 to 2014-15. There was no specific mention of whether the tax proposal would apply to individual or corporate taxpayers. Overall it is expected to benefit about 10 million taxpayers and is very popular. The Finance Bill 2024 has no specific proposals in this regard and the CBDT may issue a separate notification to provide the above relief.

No change to basic exemption limits

“As per the current tax laws, the basic tax exemption limit (BEL) under the old tax regime was Rs 2,50,000, which has remained unchanged since the last revision in Budget 2014. Even under the new tax regime, the basic tax exemption limit (BEL) is Rs 2,50,000. “Rs 3,00,000,” Surana said.

Considering that the cost of living has increased several times in the past decade, the basic exemption limit is expected to be increased to Rs 3.5 lakh under both regimes. He added that the increase in the above basic exemption limit is likely to benefit a large number of taxpayers and taxpayers out of about 70 million taxpayers.

Deadline for filing late tax returns extended to end of assessment year

The current deadline for filing overdue returns is December 31 of the relevant assessment year. For example, late returns for the financial year 2023-24 can be filed before December 31, 2023. Such late returns will attract a late fee of Rs 5,000 (Rs 1,000 only where the total income of the taxpayer does not exceed Rs 5 lakh).

“A large number of taxpayers have missed the deadline for late returns due to personal emergencies, delays in obtaining or collating data. Late returns are expected to be allowed until March 31 but may be subject to a higher fee of Rs 10,000. This will Ensure that taxpayers, while being penalized, do not become defaulters,” said Suresh Surana.

“We are still hopeful that the increase in the basic exemption limit and the belated relaxation related to returns will be introduced in the final budget,” Surana said.