Part B Budget 2024: “Analyzing India’s Taxation Reforms and other highlights”
Introduction:
In recent article we explained you about Part A of interim budget 2024- which was more about raising the living standard of people , socio-economic growth fostering agriculture and small businesses. And part B primarily focus on Tax reforms and easing the burden of tax payers.
Over the past decade, India has witnessed significant reforms and innovations in its taxation policies aimed at fostering economic growth, improving taxpayer services, and simplifying compliance procedures. From the introduction of the Goods and Services Tax (GST) to the rationalization of direct tax rates, the government has embarked on a transformative journey to enhance the ease and smooth doing business in the country. This blog delves into the key highlights of India’s taxation reforms, focusing on the recent developments outlined in the Interim Budget speech by Finance Minister Smt. Nirmala Sitharaman in part B.
Direct Tax Reforms:
One of the central pillars of India’s taxation reforms has been the rationalization of direct tax rates and the simplification of tax compliance procedures. Finance Minister Sitharaman highlighted the tripling of direct tax collections over the past decade, signaling strong revenue growth and increasing taxpayer compliance. Notably, the government has introduced progressive measures such as reducing tax liability for individuals earning up to Rs. 7 lakh and lowering corporate tax rates for domestic companies to boost investment and spur economic growth.
Furthermore, the Interim Budget announced significant relief for taxpayers burdened with outstanding direct tax demands. The withdrawal of such demands, especially those dating back to the 1960s, is expected to alleviate the anxiety of honest taxpayers and facilitate faster refunds. This move is projected to benefit approximately one crore taxpayers and marks the government’s commitment to enhancing taxpayer services and easing their burdens.
Indirect Tax Reforms:
The implementation of the Goods and Services Tax (GST) represents a landmark reform in India’s indirect tax department, aimed at unifying the fragmented tax structure and linking it strongly with compliance procedures. Finance Minister Sitharaman highlighted the positive impact of GST on reducing the compliance burden for trade and industry, as evidenced by a recent survey indicating widespread industry acceptance of the new tax system.
The Minister also highlighted the significant expansion of the GST tax base and the doubling of average monthly gross GST collections, reflecting improved tax administration and compliance. Moreover, the reduction in logistics costs and consumer prices due to GST implementation has directly benefited consumers and contributed to economic efficiency.
Conclusion:
India’s taxation reforms over the past decade have been instrumental in fostering economic growth, enhancing taxpayer services, and simplifying compliance procedures. From the rationalization of direct tax rates to the implementation of GST, the government has demonstrated its commitment to creating a conducive business environment and promoting inclusive development.
As India continues on its path of economic transformation, it is imperative to sustain the momentum of taxation reforms, address emerging challenges, and ensure equitable distribution of benefits across all segments of society. By acknowledging such innovation, increasing transparency, and prioritizing taxpayer-centric policies, India can further strengthen its position as a dynamic and resilient economy on the global stage.
