In keeping with Finance Minister Nirmala Sitharaman's comment at CII event, she left the income-tax slabs unchanged. Here are four key takeaways for the individual taxpayer.
No changes in income-tax rates and slabs
Sitharaman made no changes in the income-tax (I-T) rates and slabs, either in the old I-T regime or the new I-T regime. Accordingly, both regimes, old and new, continue co-exist. If your income is top to Rs 7 lakh and choose the new I-T regime, you do not have to pay any tax due to the higher tax rebate announced in last year's Budget (2023). The old tax regime also continues as usual.
Relief for pending tax disputes
Recognising the ordeal that small taxpayers go through when fighting in disputes with the income-tax department, Sitharaman announced some relief for old cases. For dispute cases pending since 1962, up until 2009-10, the government will withdraw disputes for outstanding tax demand of up to Rs 25,000. Also, the outstanding demand up to Rs 10,000 would be waived off for disputes linked to financial year 2010-11 to 2014-15. The move, Sitharaman said, is expected to benefit around 1 crore taxpayers.
Lokesh Shah, Partner, IndusLaw, says that overall the impact is small "as opposed to what taxpayers who were expecting much more to alleviate concerns on significant backlog of tax dispute resolution."
New housing scheme to be announced
Although the Budget didn't announce relief for homebuyers under Section 24(b), the FM announced that a new scheme would be put forth to encourage homebuyers living in rented houses, slums, chawls "to buy and build their own houses." It is unclear, at present, as to what the scheme would look like.
Benefit of tourist hubs will benefit employees claiming LTA (Leave Travel Allowance)
Encouraged by the G20 meetings in 60 locations across India, Sitharaman has offered interest free to state governments for developing tourism hubs and infrastructure facilities across India. This measure will benefit salaried taxpayers who receive Leave Travel Allowance (LTA) as part of their salary. To be sure, one can claim 2 trips in a block of four years as LTA, but only for domestic travel.
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