Finance Ministry Official Rules Out Tax Rebate Hike In Upcoming Interim Budget

New Delhi, Jan 9 (KNN) A senior official from the finance ministry, on Tuesday, stated that it is unlikely to see a tax rebate increase under the new direct tax regime in the upcoming interim Union Budget.

“There is no such proposal,” stated the official to Moneycontrol.

There were widespread speculations that the personal income tax rebate might see an increase from the current Rs 7 lakh to Rs 7.5 lakh in the upcoming vote-on-account.

A vote-on-account allows a government nearing the end of its term to secure funds for its expenditures temporarily until a comprehensive budget is approved.

The budget scheduled for presentation on February 1 will be a vote-on-account, considering the general elections set for April-May 2024.

However, it is likely that the government will declare an exemption from tax collected at source (TCS) for individual overseas credit and debit card spending, up to Rs 7 lakh per financial year, in the interim budget.

The Union Budget 2023 raised the income-tax rebate threshold for individuals choosing the new direct tax regime from Rs 5 lakh to Rs 7 lakh.

“Growth in direct taxes will surpass the GDP growth rate. A realistic target of 10.5 per cent growth in direct taxes for 2024-25 is expected.

Buoyancy is likely to remain above one next year,” a senior government official said, as reported by Moneycontrol earlier.

Buoyancy reflects the relative growth in tax revenues corresponding to an increase in national income.

The projected net direct tax collection for the ongoing fiscal year is set at Rs 18.2 lakh crore.

(KNN Bureau)