Interim Budget 2024-25: No Changes in Taxation
In her recent interim Budget presentation, Union Finance Minister Nirmala Sitharaman announced that there would be no alterations to direct and indirect tax rates, including import duties for the fiscal year 2024-25. Sitharaman highlighted the government's commitment to maintaining stability in taxation and shared positive news on reduced refund processing times.
The Finance Minister highlights a reduction in the average refund processing time, from 93 days in 2013-2014 to just 10 days in the latest fiscal year.
During her last budget announcement, Sitharaman introduced five major changes in personal income tax, primarily benefiting the middle class. In the new tax regime, which is now the default option, individuals can opt for the old one if they choose. The Finance Minister proposed an increase in the rebate limit from ₹5 lakh to ₹7 lakh in the new tax regime. This means that those who opt for the new regime will not have to pay any tax on an annual income of up to ₹7 lakh.
| Income Range | New Regime Tax Rate | Old Regime Tax Rate |
| Up to ₹3 lakh | No tax | Up to ₹2.5 lakh: No tax |
| ₹3-6 lakh | 5% (with rebate) | ₹2.5-5 lakh: 5% |
| ₹6-9 lakh | 10% (with rebate up to ₹7 lakh) | ₹5-10 lakh: 20% |
| ₹9-12 lakh | 15% | Above ₹10 lakh: 30% |
| ₹12-15 lakh | 20% | |
| Above ₹15 lakh | 30% |
Historical Context: Interim Budgets and Key Changes
Interim Budgets have traditionally avoided major changes, but Sitharaman's recent announcement breaks that trend. In 2019, Piyush Goyal introduced changes in standard deduction and tax deducted at source thresholds during an interim Budget. Additionally, there were benefits for farmers and pension coverage for unorganized sector workers.
Going further back to 2014, the interim Budget presented by P Chidambaram included cuts in excise duties for small cars, motorcycles, scooters, and SUVs, along with tax relief for mobile handsets. These instances highlight the occasional departure from the norm during interim Budget presentations.
Budget Session and Future Expectations
Current Union Budget session of Parliament commenced on 31 January and will run until 9 February. With Lok Sabha elections anticipated in April-May, the elected government is likely to present the full Budget in July. The interim Budget sets the tone for economic policies and provides a glimpse into the government's financial priorities for the upcoming fiscal year.
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