Union Budget 2024-25: Key Highlights of Proposed Changes in Income Tax Law for Easy Digest
By: Admin
July 23, 2024
Categories: budget 2024-25
4 Min Read
Proposed Changes in Income Tax Law: Union Budget 2024-25 Highlights
India’s economic growth is accelerating, accompanied by an increase in financial transactions among its populace. To streamline tax administration and facilitate compliance, the Income Tax Department has introduced significant amendments under the Finance (No. 2) Bill, 2024, aimed at reforming the Income-tax Act, 1961. These changes encompass tax reliefs, simplification measures, and enhancements to the tax base.
Overview of the Finance (No. 2) Bill, 2024
The Finance (No. 2) Bill, 2024 proposes amendments to the Income-tax Act, 1961, with the primary objectives of:
- Rates of Income-tax: Adjusting income tax rates to provide relief and align with economic objectives.
- Measures to Promote Investment and Employment: Introducing incentives to encourage investment and boost employment opportunities.
- Simplification and Rationalisation: Streamlining tax procedures and eliminating complexities for taxpayers.
- Widening and Deepening of Tax Base and Anti-Avoidance: Strengthening provisions to prevent tax evasion and broaden the tax base.
- Tax Administration: Enhancing efficiency and transparency in tax administration processes.
Key Proposals under the Finance (No. 2) Bill, 2024
The proposed amendments, detailed in Clauses 2 to 87 of the Finance Bill, 2024, are set to take effect from April 1, 2024, unless specified otherwise. Here’s a breakdown of the key changes:
- Rates of Income-tax
The Finance (No. 2) Bill, 2024 aims to revise income tax rates to provide relief to individual taxpayers and promote compliance. The adjustments are designed to align with economic conditions and support growth sectors.
- Measures to Promote Investment and Employment
Incentives for investment and employment are a cornerstone of the proposed amendments. These measures include tax breaks and allowances aimed at stimulating economic activity and job creation.
- Simplification and Rationalisation
To ease the burden on taxpayers, the Finance Bill proposes simplification of tax procedures and rationalisation of provisions. This includes reducing compliance hurdles and improving clarity in tax laws.
- Widening and Deepening of Tax Base and Anti-Avoidance
Efforts to widen the tax base and prevent tax avoidance are central to the amendments. Enhanced anti-avoidance measures and stricter compliance requirements aim to ensure fairness and equity in taxation.
- Tax Administration
Improving tax administration efficiency and transparency is another focus area. The amendments include measures to modernise tax infrastructure and enhance taxpayer services.
Detailed Analysis of Proposed Amendments
Income Tax Rates and Relief Measures
The Finance (No. 2) Bill proposes revised income tax rates structured to provide relief across different income brackets. This adjustment aims to reduce the tax burden on individuals while ensuring adequate revenue generation for the government.
Incentives for Investment and Employment
To bolster economic growth, the amendments introduce incentives such as tax holidays, investment credits, and deductions for businesses that contribute to employment generation. These measures are designed to attract investments and foster entrepreneurship.
Simplification of Tax Procedures
Complex tax procedures often deter compliance. The Finance Bill addresses this by simplifying filing requirements, introducing online platforms for tax submissions, and reducing paperwork. These steps are expected to enhance taxpayer convenience and reduce compliance costs.
Strengthening Anti-Avoidance Measures
Tax avoidance undermines the integrity of the tax system. The proposed amendments strengthen anti-avoidance provisions, including stricter penalties for non-compliance and enhanced scrutiny of high-risk transactions. These measures aim to curb tax evasion and promote a fairer tax environment.
Modernisation of Tax Administration
Efficient tax administration is crucial for effective revenue collection. The Finance Bill includes provisions for upgrading tax administration systems, improving data analytics capabilities, and enhancing taxpayer support services. These initiatives are intended to streamline processes and minimise delays in tax assessments and refunds.
Conclusion
The Finance (No. 2) Bill, 2024 introduces comprehensive amendments to the Income-tax Act, 1961, aimed at fostering economic growth, promoting compliance, and strengthening tax administration. The proposed changes encompass tax relief measures, incentives for investment and employment, simplification of procedures, anti-avoidance provisions, and enhancements in tax administration. These reforms are expected to create a more conducive environment for taxpayers while ensuring fairness and transparency in the tax system.
Stay informed about these developments as they unfold, and consult with tax professionals for personalised insights and guidance tailored to your financial situation.
For more detailed information on specific amendments and their implications, visit the official Income Tax Department website or consult a tax advisor.
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