The forthcoming Union Budget for 2024-25, to be presented by Finance Minister Nirmala Sitharaman, is expected to introduce significant changes to income tax slabs. The focus is on benefiting salaried taxpayers and the middle class, with the new tax regime becoming the default option.
Expected Tax Revisions
Experts predict potential adjustments in tax slabs and rates under the new regime. One major anticipated change is increasing the 30% income tax rate threshold from Rs 15 lakh to Rs 20 lakh, providing substantial relief to the middle class. Additionally, there is speculation about raising the standard deduction limit from Rs 50,000 to Rs 1 lakh, encouraging more taxpayers to switch to the new regime.
Income Tax Slab Adjustments
Last year, the basic exemption limit under the new tax regime was increased to Rs 3 lakh. Budget 2024 may further raise this limit to Rs 5 lakh. The current rebate limit of Rs 7 lakh might also be revised to Rs 8 lakh, further benefiting taxpayers.
Key Budget Highlights
Section Adjustments: Potential changes to Section 80C (savings and investments), Section 80D (medical insurance), and Section 80TTA (interest on bank deposits) are anticipated.
Senior Citizens: Enhancements, such as an increased basic exemption limit under the new regime, are under consideration.
National Pension System (NPS): There may be provisions to promote NPS by improving tax benefits for employee contributions.
Economic Performance
Sitharaman’s budget speech highlighted India’s robust economic growth, expected to maintain a positive trajectory. Inflation remains low and stable, moving towards the 4% target.
Budget Allocations
Education, Employment, and Skill Development: Allocations amounting to 1.48 lakh crore rupees.
Focus Areas: Emphasis on employment, MSMEs (Micro, Small, and Medium Enterprises), and support for the middle class.
Commitment to Social Justice: The Finance Minister reiterated a strong commitment to employment, skilling, and social justice.
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