Union budget 2024-25 reforms: Finance ministry shares progress report

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As preparations for the Union Budget 2025-26 are underway, the Ministry of Finance on Thursday issued a comprehensive report on the progress and achievements of the announcements made under the Union Budget 2024-25.

According to ANI, the ministry highlighted several key reforms that have been successfully implemented, particularly in simplifying taxation, reducing litigation, and enhancing tax certainty. Taking to social media platform ‘X', the Ministry of Finance reflected on the developments, stating, "Let's reflect on the significant #UnionBudget announcements and other #MajorInitiatives, and the progress made under them over time."

Reduction in Tax Litigation and appeals

The Central Board of Direct Taxes (CBDT) introduced the Vivad Se Vishwas Scheme, 2024, aiming to resolve pending income tax disputes efficiently. ANI reports that additional officers have been deployed to expedite the disposal of first appeals. The monetary limits for filing appeals have also been raised, with limits set at Rs 60 lakh for Tax Tribunals, Rs 2 crore for High Courts, and Rs 5 crore for the Supreme Court.

The finance ministry further stated that safe harbour rules have been expanded, while transfer pricing assessments are being streamlined to reduce international tax disputes. These measures aim to create a more predictable and taxpayer-friendly environment.

Simplification of Capital Gains Taxation

Major reforms in capital gains taxation were also a highlight of the 2024-25 budget. As per ANI, the introduction of just two holding periods - one year for listed assets and two years for unlisted and non-financial assets - has significantly simplified compliance for taxpayers. Long-term capital gains now attract a reduced tax rate of 12.5 per cent, while short-term gains are taxed at 20 per cent.

Additionally, the exemption limit for capital gains on certain financial assets has been increased from Rs 1 lakh to Rs 1.25 lakh annually, benefitting middle- and lower-income groups. The rationalisation of tax rates and elimination of indexation have further simplified the calculation process.

Reassessment and Reopening of Tax Cases

ANI reports that the government has revised provisions for reassessment, reducing uncertainty for taxpayers. Reassessments beyond three years are now permitted only if the escaped income exceeds Rs 50 lakh, with a maximum period of five years. For search cases, the reassessment window has been reduced to six years, fostering greater tax certainty.

Overhaul of the Income Tax Act, 1961

The Ministry of Finance has also undertaken a comprehensive review of the Income Tax Act, 1961. According to ANI, over 6,500 suggestions have been received from stakeholders, and 22 specialised committees are currently reviewing various aspects of the Act. The objective is to make the law concise and easier to understand, with the exercise expected to be completed within six months.

(With inputs from ANI)