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Budget 2024: Focus on new income tax regime, faster processing of refunds expected
Budget 2024: Finance Minister Nirmala Sitharaman is expected to present the Union Budget 2024 in the Parliament on February 1, 2024. Since 2024 is the year of Lok Sabha elections, the Budget 2024will be an interim one, or vote on account. Such a budget is presented to provide for government finances and smooth functioning of ministries till a new government is elected.
According to Tapati Ghose, Partner, Deloitte India, Budget 2024 may focus on the new income tax regime. “This year, the government shall present the vote on account before the 2024 general elections. While it may not be the full budget, it is not expected to be a muted one,” she says in Deloitte’s Budget 2024 expectations report.
Union Budget 2024: Personal Tax Expectations
If one observes the past pattern of the FM, the focus has been on making structural changes rather than providing tax breaks, Tapati notes. “Given this, one may expect to focus on the New Tax Regime, faster processing of tax refunds, robust tax collection machinery, and speedy disposal of appeals,” she says.
Tapati also sees Union Budget 2024 as an opportunity to expand the information captured through Annual Information Statement (AIS). At present, AIS captures information relating to payments where tax is deducted/collected, bank interest, dividends, sale and purchase of capital assets, foreign remittance, refund from the income tax department, etc. This information helps prepare tax returns.
Her recommendations on AIS are:
According to Tapati Ghose, Partner, Deloitte India, Budget 2024 may focus on the new income tax regime. “This year, the government shall present the vote on account before the 2024 general elections. While it may not be the full budget, it is not expected to be a muted one,” she says in Deloitte’s Budget 2024 expectations report.
Union Budget 2024: Personal Tax Expectations
If one observes the past pattern of the FM, the focus has been on making structural changes rather than providing tax breaks, Tapati notes. “Given this, one may expect to focus on the New Tax Regime, faster processing of tax refunds, robust tax collection machinery, and speedy disposal of appeals,” she says.
Tapati also sees Union Budget 2024 as an opportunity to expand the information captured through Annual Information Statement (AIS). At present, AIS captures information relating to payments where tax is deducted/collected, bank interest, dividends, sale and purchase of capital assets, foreign remittance, refund from the income tax department, etc. This information helps prepare tax returns.
Her recommendations on AIS are:
- The information, collated based on PAN, is reported in AIS to provide a bird’s eye view of transactions under the PAN. However, the information captured is not inclusive of transactions that may be relevant and reported in the tax return. Amongst many transactions where the PAN is quoted, transactions such as Employer Provident Fund, Public Provident Fund, National Pension Scheme, life and health insurance policies, principal, and interest on loan repayment, could be additionally captured to widen the coverage of AIS. This would help in pre-filling the tax return with the data relating to applicable exemptions, deductions, the taxability of withdrawal proceeds, etc, she says.
- At present, AIS provides information on the purchase and sale of securities in SFT portions of the AIS from NSDL/CSDL. While this information helps provide a bird’s eye view of the transactions made by the taxpayer in securities and mutual funds, it does not serve the purpose of capturing information and ease of data collection to prepare the tax return. Amongst other information provided in the AIS under this segment, mentioning the date and cost of acquisition, may be useful. This helps in accurate computation of capital gains, without the taxpayer having to go through records for this information.
