Union Budget 2024.
Credit: DH Photo
By Rajesh H Gandhi, Partner, Deloitte India
The Finance Minister unveiled the interim Budget for 2024, highlighting a decade of inclusive growth and fiscal prudence, emphasising the success of various development programmes, and mentioning robust 7 per cent economic growth over the past 10 years, surpassing the global average of 2 per cent. She also reported that the past five years witnessed a major overhaul in taxpayer services, transitioning from a jurisdiction-based assessment to a faceless framework, and with technological advancements, there has been an improvement in efficiency and transparency, with return processing time reduced from 93 days in 2013–14 to just 10 days in the current fiscal year.
As expected, no structural changes were proposed to the tax law. It has been proposed to extend by one year the tax benefits provided to sovereign wealth funds and pension funds on their dividends, interest, and capital gains from investment in infrastructure. Similar extensions have been given for the three-year holiday for start-ups and allowing one more year for aircraft and leasing companies to set up units in GIFT City. Banks have also been given another year to set up an investment division in GIFT City for availing full capital gains tax exemption from investment in non-equity securities either directly or through a Cat 3 AIF.
The clarifications on TCS on LRS and purchase of overseas tour programme provided by CBDT vide Circular no. 10 of 2023, especially the clarification on the exemption limit of Rs 7 lakh is now proposed to be incorporated into the tax law.
Also, to address taxpayer concerns, the government has proposed to withdraw tax demands up to Rs 25,000 for the period up to FY 2009-10 and up to Rs 10,000 for FY 2010-11 to FY 2014-15. Approximately 1,00,00,000 taxpayers are expected to benefit from this move, facilitating smoother refund processes for subsequent years.
As this is an interim Budget, it is hoped that the final Budget will address industry-specific demands and issues, including extending the sunset date to 31 March 2025 for new manufacturing companies as well as for service and priority sectors like FinTech, Infrastructure, Green energy, etc., (to get it aligned with other extensions provided to start-ups, sovereign wealth funds and IFSC units), to remove equalisation levy based on the transitional approach agreed in October 2021, between India and USA, introduction of a simple and specific tax and regulatory framework, for private equity and venture capital players.