Budget 2024: How The Interim Budget Will Benefit Taxpayers

The individual taxpayer might not have seen any headline change in the tax rates in the interim budget 2024, but there are still a few things that will make their tax experience better.

Here are some of the things that will impact them:

The biggest relief for an individual is going to come from the proposal that the tax department will pull back from disputed demands of up to Rs 25,000 that exist till the year 2009. The figure is Rs 10,000 for such amounts that exist from 2010 to 2015. In both these cases, the amount might look to be small but the impact of this is huge.

The problem for a taxpayer arises when even clear items are disputed by the tax department and a demand notice is served on them. In many cases, even after replying to such notices and giving the necessary proof, they do not disappear from the records. The end result is that when a refund becomes due, the taxpayer gets a rude shock that this refund is adjusted against the past demand. This requires the process for this set-off to be disputed and it remains outstanding. This causes a lot of mental agony and problems for the taxpayer.

The fact that there are 1 crore such taxpayers is proof of the nature of the problem. A couple of points here will be important, where the first is that if the amount of refund has already been adjusted in the past and the taxpayer did nothing, then the matter is closed. The other thing is that the taxpayer must always raise a dispute with wrong amounts and those who have done so now stand to benefit.

There are other benefits, too, that an individual might gain in the coming years as the budget has mentioned several such areas. One of them is the rooftop solar scheme where installation will lead to saving of power cost that can add money in the hands of people. Similarly, with more rural homes to be constructed in the low income housing category, this will also help people get access to their dream home.

The move of the government to lower the fiscal deficit and cut back on borrowing will be a big relief for all borrowers, as this will translate into lower yields in the bond market. This indirectly is like a rate cut, so one can expect interest rates to soften going ahead, reducing the pressure on borrowers.

Arnav Pandya is founder of Moneyeduschool.