On Thursday, February 1, 2024, the Hon'ble Finance Minister, Nirmala Sitharaman, unveiled Interim Budget 2024 in the Indian Parliament.
We are pleased to provide you with a consolidated tax and policy alert, summarizing the crucial amendments announced.
Macro-fiscal developments
- 10.5% nominal GDP growth rate estimated for FY25.
- 7% real growth in MoF's estimate (in the review of Indian economy released on 29 January 2024).
- 11.5% growth in gross tax revenues with an assumed buoyancy of 1.09 for FY25.
- 16.9% growth in capital expenditure in FY25.
- 5.1% fiscal deficit budgeted for FY25 with target of 4.5% by FY26.
Corporate tax
- No changes in tax rates.
- Sunset date for certain provisions extended from 31 March 2024 to 31 March 2025 notably for start-ups, IFSC aircraft/ ship leasing units, investment division of non-resident IFSC banking units, sovereign wealth funds and pension funds.
- Codification of changes announced earlier to tax collection at source on LRS remittances and purchase of overseas tour package.
- Withdrawal of small outstanding tax demands pertaining to past tax years up to 2014-15.
Indirect tax
- Goods and Services Tax
- No change in tax rates.
- Input Service Distributor provisions made mandatory.
- Penalty introduced for non-registration of packing machines by manufacturers of tobacco and tobacco-related products.
