Budget 2024 sees no change in income tax slabs. Here’s why

Budget day is full of anticipation and expectations. This Budget was no different, with the common man having some hope for income tax relief. However, it was not to be, as Finance Minister Nirmala Sitharaman in her Budget speech said that there would be no change in the existing tax regime — both direct and indirect. Delivering her sixth Budget speech in Parliament, she said: “I propose to retain the same tax rates for direct and indirect taxes including import duties.” Why is it that interim Budgets don’t usually see any big changes in income tax rates or slabs? We have the answer for you. No change in tax slabs this Budget Finance Minister Nirmala Sitharaman while presenting the interim Budget 2024 kept the tax slab rates unchanged for both new and old income tax regimes. “Keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties,” Sitharaman said in her speech, which was her shortest at 58 minutes . Last Budget, in 2023, Nirmala Sitharaman had introduced a new tax regime in which no tax would be levied for income up to Rs 3 lakh. Then income between Rs 3-6 lakh would be taxed at five per cent and income between Rs 6-9 lakh would be taxed at 10 per cent. The next three slabs were: income between Rs 9-12 lakh, taxed at 15 per cent, income between Rs 12-15 lakh at 20 per cent and income of Rs 15 lakh and above to be taxed at 30 per cent.

As per the old regime, income up to Rs 2.5 is exempt from taxation. Income between Rs 2.5 to Rs 5 lakh is taxed at the rate of 5 per cent under the old tax regime. Personal income from Rs 5 lakh to Rs 10 lakh is taxed at a rate of 20 per cent in the old regime and any income above Rs 10 lakh is taxed at a rate of 30 per cent. However, she did offer some relief to taxpayers by withdrawing a large swathe of outstanding petty direct tax demands . In her speech, the Nirmala Sitharaman said: “There are a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, which continue to remain on the books, causing anxiety to honest tax payers and hindering refunds of subsequent years. I propose to withdraw such outstanding direct tax demands up to Rs 25,000 pertaining to the period up to financial year 2009-10 and up to Rs 10,000 for financial years 2010-11 to 2014-15. This is expected to benefit about a crore taxpayers.” **Also read: The big, big takeaways from the interim Budget** Keeping with convention Nirmala Sitharaman maintained convention by not making any radical announcements in her Budget speech. The last interim Budget in 2019 had also seen then Finance Minister Piyush Goyal making no changes to the tax slabs. At the time, he had only increased the standard deduction for salaried people from Rs 40,000 to Rs 50,000. He had also increased tax deducted at source (TDS) limit from Rs 10,000 to Rs 40,000 for post office savings and bank deposits. [caption id=“attachment_13679522” align=“alignnone” width=“640”] Former Finance Minister Piyush Goyal leaves for Parliament to present the interim Budget 2019- from his North Block office in New Delhi. File image/PTI[/caption] Prior to that, India saw an interim Budget in 2014 when the Narendra Modi-led National Democratic Alliance (NDA) defeated the United Progressive Alliance. At the time, Finance Minister P Chidambaram had also not made any changes to tax laws. He had only reduced excise duty from 12 per cent to 10 per cent on some goods, and gave relief to the automobile sector. This convention of not making any big bang Budget announcement was broken during the Atal Bihari Vajpayee government’s 2004 interim Budget. In 2004, the then Finance Minister Jaswant Singh had announced measures such as the extension of the ‘Antyodaya Yojana Scheme’, the merger of 50 per cent dearness allowance for the central government employees with basic pay, reduced customs duty on free baggage at international airports from 50 per cent to 40 per cent among other things. Unfortunately, it seemed that these measures didn’t help and the NDA did not win the following Lok Sabha elections. Interim budgets and no big changes Finance Minister Nirmala Sitharaman’s sixth Budget speech today is an interim Budget . For those unaware, an interim Budget refers to the budget of a government that is going through a transition period. In an election year, as this year is, the incumbent Government cannot present a full Budget as there may be a change in the executive after the polls. Hence, the need for an interim budget. In an interim Budget, the finance minister will present the current state of the Indian economy, its fiscal status, including India’s revised estimated growth in the next year. As stated earlier, big changes aren’t made in the Budget with a view that the government may change. [caption id=“attachment_13679542” align=“alignnone” width=“640”] PTI[/caption] Additionally, there is also a risk of violation of the model code. The Model Code of Conduct (MCC) is a set of guidelines established by the Election Commission to conduct free and fair elections in the country. In simple terms, they are the dos and don’ts for political parties and candidates before and during the election. As per the MCC, candidates and parties can not announce any new grant or financial scheme or make such promises once the election dates are announced. They can’t make declarations of new roads, or make promises of free water. Speaking on the same, Former Lok Sabha secretary-general PDT Achary says it is not appropriate for a government facing elections to announce programmes and policy changes for the next year. “The next elected government is competent to do it,” he said in a Business Standard report. With inputs from agencies