Interim Budget 2024: A trailer of the visionary roadmap for “Viksit Bharat” – key tax proposals to know

By Ravi Jain
The finance minister set the stage for a “Viksit Bharat by 2047”, on the core principles of ‘Sabka Saath’, ‘Sabka Vikas’, ‘Sabka Vishwas’, with ‘Sabka Prayas’ being added as a new theme in the interim Budget.
This Budget’s four core strategic areas came as GYAN: G for Garib Kalyan, Y for Youth empowerment, A for Anna-data i.e., farmer welfare and N for Nari utthan i.e., support for women entrepreneurs.These form the pillars of a comprehensive inclusive development. The Government’s commitment to sustainable development under the strategy for Amrit Kaal includes achieving ‘Net Zero’ by 2070, rooftop solarization for one crore households and robust health initiatives.
The Indian economy’s resilience takes center stage amidst positive indicators of declining current account deficit as a percentage of GDP, falling unemployment rates, and a notable rise in digital transactions. These statistics affirm the robustness of the economy, showcasing a trajectory of growth and stability.
The achievements in taxation reforms are nothing short of remarkable, with direct tax collections more than trebling in the last decade, the number of tax return filers increasing by 2.4 times, average processing time of tax returns plummeting from 93 days in FY 2013-14 to an impressive 10 days in FY 2023-24, resulting in issuance of quick refunds. These are the results of consistent progressive measures thus obviating the need for, and rightly avoiding, any last-minute populist measures.

Key tax proposals in Budget 2024:

Retained tax rates: No change in existing tax rates, both for direct and indirect taxes, is a good indicator of stability and predictability for investors and taxpayers.
Waiver of old tax demands: A welcome move to waive outstanding tax demands that are minor, disputed, and unreconciled. This involves the withdrawal of outstanding direct tax demands up to Rs. 25,000 pertaining to the period up to FY 2009-10 and up to Rs.10,000 for FY 2010-11 to 2014-15.
Extension of sunset clauses: The Government’s commitment to fostering a business-friendly environment is evident in its intent to extend specific tax benefits for start-ups, investments by sovereign wealth funds/ pension funds, and certain IFSC units. The extension has been made now until March 31, 2025. This might help in creating a conducive landscape for business.
Tax collection at source: To align with the CBDT notification issued earlier, the provisions relating to tax collection at source concerning remittances under the Liberalized Remittance Scheme have now been formally incorporated in the Finance Bill, 2024, setting the rate at 20% for amounts exceeding Rs. 7 lakhs in a financial year.
Extension of Faceless Scheme time limit: The Finance Bill, 2024 proposes an extension of the time limit for introducing the faceless scheme by the Central Government for transfer pricing proceedings, DRP Proceedings, and ITAT Proceedings, up to March 31, 2025.
The interim Budget 2024 may not have proposed significant tax announcements, but it very well positioned the prelude to the full budget post the upcoming elections. Considering the potential impact on the population across the four pillars of GYAN, a sizable portion of India stands to be covered. The interim Budget’s focus on the tax front resembles a report card, highlighting the maturity achieved by our tax system. The enhancement of taxpayer services was emphasized as a key priority.
(Ravi Jain is Partner, Vialto Partners. Vikas Narang, Director and Pawan Digga, Manager at Vialto Partners contributed to the article. Views are personal)