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Union Budget 2024: Higher tax revenues than cradle in 2023-24, dividends due to huge profits made by state-owned enterprises and large income transfers by the Reserve Bank were expected to provide relief to the inflation-hit middle class and salaried individual taxpayers. It seems that the budget has increased the deficit instead of benefiting the local people, and instead of providing tax relief, provisions have been made to increase the tax burden.
No discounts or rebates of any kind on investments
The Finance Minister has given more relief in the new tax system, in which no exemption or concession has been given on investment, while the standard deduction in the old tax system has been increased to Rs 75,000, which has reduced the tax burden by a maximum of Rs 2500 or Rs 5000 per year (Rs 208 or Rs 419 per month). Tax rates have been reduced in the new system but it has been reduced to Rs 100. 17,500 per month i.e. Rs. 1458 will be benefited.
Tax on long-term capital gains increased to 12.5%
It is worth noting that to get relief in the new tax system, first of all, one will have to give up the tax benefits on savings like insurance, pension scheme, mutual fund or fixed deposit. This means that there is a risk of stopping savings for tax relief. On the other hand, this is a shock for families planning to buy property by selling old jewellery or people planning to buy new property by selling inherited property.
In the Union Budget, long-term capital gains tax on sale of gold, unlisted shares or bonds or real estate has been increased to 12.5 percent. Not only this, the benefit of indexation, which protects against rising property prices and inflation, has also been abolished.
Even small investors are not exempted from income tax
The government believes that the current boom in the stock market is due to retail investors. But, the Finance Minister did not spare even these small investors. Capital gains tax has been increased on short-term (i.e. less than one year) or long-term (more than one year) investments in listed shares, bonds, debentures or mutual funds. A blow to small investors, these measures will benefit large companies with registered offices in Gandhinagar GIFT City. There is no capital gains tax on GIFT City and it is also exempted from income tax for 10 years.
The new government changed the tax structure
The exercise to simplify the income tax law began in the budget of 2009-10. After this, it became the Income Tax Code, a committee of Parliament approved it but the government changed in 2014. The new government made huge changes in the Income Tax Code. Instead of simplifying the tax structure, the new government adopted the policy of making more and more people pay tax, bringing more and more transactions into the tax net.
Finance Minister announces to simplify the income tax law in the next six years
In this budget, the Finance Minister has once again announced to simplify the income tax law in the next six years. However, this time due to the new income tax system, the government wants to abolish the old system in the coming years so that all savings stop getting tax relief. If this tax law is considered simple, then note that in this budget, the tax on foreign companies has been reduced by five percent to 35 percent.
The limit of appeal has been increased in the budget so that the number of appeals against the notice of the tax department in the tribunal or court is reduced and the taxpayer pays the tax immediately. The government wants the taxpayer to pay the tax on receiving the notice or assessment, even if the department's interpretation of the law is wrong. Increasing the limit of appeal will reduce the number of cases but the taxpayer will suffer.
