The budget for FY 2024-25 did not introduce any changes to the income tax slabs or the tax rates for companies, LLPs, or other entities, maintaining the status quo for taxpayers across the board. This means individuals, businesses, and corporations will continue to be taxed at the existing rates without any increases or decreases. Here's a more detailed look at the tax-related highlights and their implications:
Income Tax Slabs Unchanged: Individual taxpayers will continue to be taxed according to the same slabs that were in effect previously. There are no adjustments to the threshold limits, rates, or exemptions under the various tax regimes (old and new).
Corporate Tax Rates Remain the Same: Businesses, including corporations, LLPs, and other types of entities, will not see any changes in their tax rates. This decision aims to provide stability and predictability to the business environment, encouraging investment and growth.
Extensions for Startups and Certain Funds: The government has decided to extend tax benefits for startups and sovereign wealth funds until March 2025. This extension includes various exemptions and concessions designed to support the growth and development of startups and to attract more long-term investment into the country. Specifically, startups might enjoy benefits such as tax holidays or deductions, while sovereign wealth funds could see exemptions on income from certain types of investments in India.
Taxpayer Service Enhancements: To ease the burden on taxpayers and to streamline tax administration, the government announced the withdrawal of direct tax demands for smaller amounts that are outstanding for older assessment years. Specifically, tax demands up to ₹25,000 for the period up to the financial year 2009-10 and up to ₹10,000 for the period up to 2014-15 will be withdrawn. This move is expected to benefit around 1 crore (10 million) people, clearing small, pending tax disputes and reducing the administrative load on tax authorities.
Indirect Taxes and Duties: The budget speech did not mention changes to the GST rates or adjustments to custom duties that would affect the general tax framework. The continuity in indirect tax rates suggests a focus on maintaining economic stability and encouraging consumption.
By keeping the tax slabs and rates unchanged, the government seems to be focusing on providing a stable and predictable tax environment. This approach is aimed at fostering economic growth, encouraging investments, and supporting the recovery process without putting additional tax burdens on individuals and businesses. The extension of tax benefits for startups and specific investment funds further underscores the government's commitment to innovation and long-term economic development.
