Finance Minister Nirmala Sitharaman will present the Union Budget 2024 on July 23, 2024. This budget is eagerly anticipated for potential relief to salaried and middle-class taxpayers, as well as the general public.
People are curious about what the Modi Government’s Budget 2024 will bring. They are particularly interested in how the Indian economy, which has surpassed the Economic Survey’s 6.5-7% GDP growth estimates for FY25, will be reflected in the budget.
Experts believe that the new income tax regime could become more attractive by adjusting the tax rates and slabs. They suggest that the 30% tax rate should apply to incomes above Rs 20 or Rs 25 lakh, rather than the current Rs 15 lakh threshold.
Key Sections That Might Be Impacted:
1. Standard Deduction: Personal tax experts agree that the standard deduction limit, currently Rs 50,000, should be increased to Rs 1 lakh. This is especially important since it has not been updated since the financial year 2019-20.
2. Basic Exemption Limit: To encourage more people to choose the new income tax regime, experts recommend raising the basic exemption limit from Rs 3 lakh to Rs 5 lakh. Additionally, they suggest increasing the tax rebate limit from Rs 7 lakh to Rs 8 lakh.
3. Interest on Bank Deposits: Experts argue that the current exemption limit of Rs 10,000 for interest on bank deposits is too low and should be increased. They also suggest including term deposits and fixed deposits under this exemption.
4. Health Insurance Premium Deduction: Salaried taxpayers are requesting an increase in the health insurance premium deduction under Section 80D from the current Rs 25,000 to Rs 50,000 or even Rs 1 lakh. This change would provide relief and encourage people to prioritize their health.
5. Housing Loan Deductions: There is a demand to raise the deduction limit on interest paid towards housing loans for self-occupied properties from Rs 2 lakh to at least Rs 3 lakh. Including this benefit in the new tax regime is also suggested.
6. Capital Gains Tax: Experts note that the current capital gains tax structure is complex and inconsistent. They anticipate the government might propose a simplified regime, possibly adjusting tax rates and computation methods.
7. TCS Rate on Foreign Transactions: In Budget 2023, the TCS rate for certain transactions was increased from 5% to 20% to curb foreign exchange outflow. However, this increase has significantly impacted many individuals. Experts recommend lowering the TCS rate from 20% to 10% to ease this burden.
