Finance Ministry Reflects on Union Budget 2024-25 Achievements Ahead of New Budget
New Delhi, January 16, 2025
As the Union Budget 2025-26 approaches, the Ministry of Finance has released a comprehensive report card detailing the achievements and progress made on the budget announcements from the previous year.
In a social media post on ‘X’, the Finance Ministry stated, “let’s reflect on the significant #UnionBudget announcements and other #MajorInitiatives, and the progress made under them over time.”
Reduction in Litigation and Appeals
One of the key highlights is the introduction of the Vivad Se Vishwas Scheme, 2024, by the Central Board of Direct Taxes (CBDT), aimed at resolving pending income tax disputes. To expedite the disposal of first appeals, additional officers have been deployed. The monetary limits for filing appeals have been raised to ₹60 lakh for Tax Tribunals, ₹2 crore for High Courts, and ₹5 crore for the Supreme Court, as per CBDT’s guidelines. Furthermore, the scope of safe harbour rules has been expanded, and transfer pricing assessments are being streamlined to reduce international tax disputes.
Simplification of Capital Gains Taxation
Significant changes in capital gains taxation were implemented, including the introduction of only two holding periods: one year for listed assets and two years for unlisted and non-financial assets. Long-term gains now attract a reduced tax rate of 12.5 per cent, while short-term gains are taxed at 20 per cent. To benefit middle- and lower-income groups, the exemption limit for capital gains on certain financial assets was increased to ₹1.25 lakh per year from ₹1 lakh a year. The rationalisation of tax rates and removal of indexation have simplified computations.
Reassessment and Reopening of Cases
The provisions for reassessment have been thoroughly revised. Assessments can now only be reopened beyond three years if the escaped income exceeds ₹50 lakh, with a maximum period of five years. For search cases, the reassessment window has been reduced to six years. This move is expected to enhance tax certainty and reduce disputes.
Comprehensive Review of the Income Tax Act, 1961
The government has initiated a complete overhaul of the Income Tax Act, 1961, to make it concise and easier to understand. Over 6,500 suggestions have been received from stakeholders, and 22 specialised committees are reviewing various aspects of the Act. The goal is to complete this exercise within six months.
These reforms highlight the government’s progress on its budget promises of reducing litigation and fostering a taxpayer-friendly environment.
