Lok Sabha passed the Finance Bill, 2024

Newdelhi:7/8/24:Lok Sabha today passed the Finance Bill, 2024. The Bill gives effect to the financial proposals of the Central Government for the financial year 2024- 2025. With the passage of the Bill, the budgetary exercise is now complete. Replying to the discussion on the Bill in Lok Sabha, Finance Minister Nirmala Sitharaman emphasized that the approach to taxation has been to bring in greater simplification of tax laws and procedures and enable growth and employment in this country. She said the Narendra Modi government has brought in transformational changes in tax governance in the last decade. She pointed out that without drastically increasing taxes and minimizing litigation, the government has helped in bringing a simplified taxation regime, greater transparency, and ease of compliance.

Refuting claims of tax burden on the middle class, the Finance Minister said that in 2023, the slabs for personal income tax were significantly liberalized. She said all taxpayers had reduced tax liabilities of 37 thousand 500 rupees. She highlighted that this government has again revised slabs in the new regime in this budget and this will have an impact on the middle class.

The Finance Minister went on to add that the standard deduction for salaried employees has also been from 50 thousand to 75 thousand in the new regime in this budget. This is an effective relief of upto 17 thousand 500 rupees for a salaried employee. Deduction on Family Pension for Pensioners is proposed to be enhanced from 15 thousand rupees to 30 thousand rupees. Ms Sitharaman said that for salaried employees, the Deduction on Employers’ contribution in the case of employees who are in the private sector and public sector banks who are opting for the new regime, has been raised from 10 percent to 14 percent in this Budget.

The Finance Minister highlighted that in the last two years, substantial relief has been given to the middle class. She added that during the COVID pandemic, Prime Minister Narendra Modi’s direction to her was totally in contrast with what was happening in developed nations – no tax on citizens to meet COVID expenditure.

Ms Sitharaman said that small, old, and petty unverified tax demands of ninety lakh taxpayers were removed from the record as announced in the Interim Budget of 2024. She said that for Start-Ups, the removal of Angel Tax has come as a big relief. She pointed out that earlier, this country had 98 percent taxation in one of the earlier regimes.

On Indirect Taxes, the Finance Minister said that regarding Customs, several steps have been taken to facilitate international trade and ensure that processes are simpler and faster. She added that this will boost domestic production and enhance export competitiveness. She said reducing customs duty on several items listed in the Budget was aimed at bringing down prices of raw materials and making domestic production far more cost-effective.

The Finance Minister said a record number of 7.28 crores of income tax returns for 2024-25 were filed till the 31st of last month, which is a 7.5 percent increase as compared to last year. She expressed happiness that over 58 lakh ITRs were received from first-time Income Tax filers. She said this indicates a widening of the tax base.

Earlier, participating in the discussion, Jagdambika Pal of BJP said, the Finance Bill will help in achieving the targets set in this year’s budget for making India a developed nation. He said the present budget will simplify the taxation system in the country. He lauded the government’s decision of abolishing the Angel Tax saying it will provide big relief to the country’s startup ecosystem. He said the government is working to make the country the third-largest economy in the world. Muhammed Hamdullah Sayeed of Congress alleged that the government is giving more leverage to Corporates and their tax liabilities are less as compared to taxes paid by people. He urged the government to relook its decision related to the indexation issue. After the passage of the Bill, the Lok Sabha Speaker Om Birla adjourned the House for the day.