Income Tax Slab 2024-25: Tax rates to stay unchanged, announces FM in interim Budget, with a minor relief for some taxpayers

Income Tax Slabs 2024-25, Budget Update: During the interim Budget presentation, Union Finance Minister Nirmala Sitharaman announced that there would be no alterations to the existing taxation system. She proposed to maintain the current direct and indirect tax rates, including import duties. Sitharaman highlighted the significant reduction in the average time taken for tax refunds, which decreased from 93 days in 2013-2014 to just 10 days in the past year. She also noted a 50% increase in the average real income of individuals.

While maintaining tax rates, Sitharaman provided relief to taxpayers in the Interim Budget for 2024-25 by addressing outstanding petty direct tax demands. She addressed concerns about unresolved tax demands dating back to 1962, causing anxiety to honest taxpayers and hindering subsequent refunds. Sitharaman proposed to withdraw such demands up to Ôé╣25,000 for the period up to the financial year 2009-10 and up to Ôé╣10,000 for the financial years 2010-11 to 2014-15. This initiative is expected to benefit approximately one crore taxpayers.

During the previous Budget, Nirmala Sitharaman made five significant announcements regarding personal income tax aimed at benefiting the middle class. She mentioned that while the new tax regime would become the default option, taxpayers could still choose the old one if they preferred. 

Sitharaman presented improving the rebate limit from Rs 5 lakh to Rs 7 lakh in the new tax regime. This means that individuals who opt for the new tax system would not need to pay any tax on their annual income up to Rs 7 lakh.

Historically, interim Budgets have not included major changes. For example, in 2019, then Finance Minister Piyush Goyal proposed increases in the standard deduction and the threshold for tax deducted at source, along with benefits for farmers and pension coverage for unorganized sector workers. Similarly, in 2014, the interim Budget presented by P Chidambaram announced reductions in excise duties for small cars, motorcycles, scooters, SUVs, and tax relief for mobile handsets.

The Budget session of Parliament began on January 31 and will continue until February 9. Lok Sabha elections are expected to take place around April-May, after which the elected government is likely to present the full Budget in July.

Also Read: Key Highlights: Interim Union Budget 2024-25