Union Budget 2024 | FAQs: What is tax abatement?

Finance Minister Nirmala Sitharaman will present the Union Budget on July 23, having already presented an Interim Budget ahead of the Lok Sabha elections. In light of the upcoming Budget, we take a look at some of the terms associated with the exercise.

What is tax abatement?

In order to boost economic development, the government reduces taxes for corporates and businesses for a certain period. Such reductions are called tax abatement. The purpose of abatement is to support the development or economic activity within a city or community.

Property tax is one of the most common types of tax abatement given to businesses for a certain period to expand their existing operations within the city. If an individual or business entity is paying too much tax, it can request the tax authorities for tax abatement.

Most abatements expire after a fixed number of years, at which point taxes return to their ordinary level.

Abatements are often seen in the real estate industry. There are tax abatement programs existent in certain cities that cut down property tax payments on homes. Abatements also attract more buyers to locations having low demand.

Union Budget 2024 | Making a record for any Finance Minister, Nirmala Sitharaman will be presenting her 7th Union Budget on July 23, 2024 under the Modi 3.0 government. While inflation has burnt a hole in the pockets of 'aam janata', will this Budget spell relief for Indians? Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.