Union Budget 2024: The general population, particularly those in the salaried and middle-class brackets, are anticipating significant relief measures from the government through the budget being presented today. If the government announces any tax exemptions, it could offer a relief to these groups. Let's know what can we expect from the Modi 3.0 government's 2024 budget.
Key expectations include:
- Income Tax Relief: There is hope for increased exemptions or deductions that could ease the tax burden on individuals. Experts suggest that the new income tax system could be enhanced by adjusting the income tax slab rates and thresholds. They recommend raising the 30 per cent tax slab to apply on income exceeding Rs 20 or 25 lakh, instead of the current Rs 15 lakh limit.
- Section 80C and Standard Deduction: It is anticipated that Section 80C exemptions might be incorporated into the new income tax regime. The current limit of Rs 1.5 lakh, unchanged since 2014, is expected to be raised to Rs 3 lakh to promote savings. Additionally, there is a call to increase the standard deduction limit, which was set at Rs 50,000 in the new tax system last year, to Rs 1 lakh.
- Basic exemption limit and interest on bank deposits: To attract more taxpayers to the new income tax system, personal tax experts suggest raising the basic exemption limit from Rs 3 lakh to Rs 5 lakh. Additionally, there is a proposal to increase the tax exemption limit for interest on bank deposits from Rs 7 lakh to Rs 8 lakh. Experts also argue that the current exemption limit of Rs 10,000 for interest on bank deposits is insufficient and should be revised upwards.
- Enhanced Health Insurance Benefits: Salaried taxpayers are calling for an increase in the health insurance premium deduction under Section 80D, from the current limit of Rs 25,000 to Rs 50,000 or even Rs 1 lakh. This adjustment would offer significant relief and encourage individuals to prioritize their health. Additionally, there is a demand to raise the deduction limit on interest paid for housing loans on self-occupied properties from Rs 2 lakh to at least Rs 3 lakh, with a request for this to be included in the new tax regime.
- Rationalising capital gains tax structure: Experts say the government recognises the complexities of the current capital gains tax structure, which suffers from inconsistencies in tax rates and holding periods for different instruments within the same asset class. The same indexation benefit does not apply uniformly across different scenarios. They anticipate that the government may propose a streamlined capital gains tax regime, possibly involving adjustments in tax rates and calculation methods.
Overall, taxpayers are looking for measures that address inflation, enhance financial security, and provide tangible benefits to improve their economic well-being.
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