The anticipation for major income tax alterations in the upcoming budget on February 1, 2024 raises questions about its feasibility. Scheduled during a period of parliamentary elections from April to June 2024, the imminent budget is expected to be an Interim Budget or Vote on Account. This situation prompts speculation about the likelihood of substantial income tax adjustments.
India, since its independence, has witnessed 91 Budgets, with 14 presented as Interim Budgets or Vote on Account. With the impending elections, the country is bracing for its fifteenth Interim Budget or Vote on Account for FY 2024-25, set to be unveiled on February 1, 2024. The Election Commission of India's Code of Conduct prohibits the ruling party from proposing major tax reforms during an Interim Budget to maintain fairness in the voting process, preventing undue influence on voters.
Finance Minister Nirmala Sitharaman recently highlighted that the forthcoming February 2024 Budget would merely cater to meeting expenses until a new government assumes office. Expected to be a Vote on Account, taxpayers shouldn't anticipate remarkable announcements.
What Exactly is an Interim Budget?
An Interim Budget mirrors a comprehensive Budget, encompassing the nation's complete financial statements. It projects estimates for both expenditure and receipts for the part of the financial year the current government remains in power. Following the mandatory discussion in the Lok Sabha, the Interim Budget proceeds for approval.
Understanding the Vote on Account
On the other hand, a Vote on Account solely focuses on government expenditures. Constitutional provisions prevent the ruling party from withdrawing funds from the Consolidated Fund of India without legal approval. The Vote on Account caters specifically to routine expenses like salaries, ongoing programs, and debt servicing, allowing the government to withdraw funds from the treasury. This measure can pass in the Lok Sabha without extensive discussion.
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