Budget 2024: Will Finance Minister Nirmala Sitharaman Increase Income Tax Exemption Limit?

Budget 2024: Finance Minister Nirmala Sitharaman's Budget 2024 has raised a lot of expectations as it marks the beginning of the Modi government's third term. Reuters Taxpayers are expected to get relief from Modi 3.0's upcoming first full Budget 2024, as the government is considering lowering income tax rates for certain groups of individuals, the report said. The report also indicated that the government is considering lowering the income tax rate for individuals who earn annual income. ₹10 lakhs

Money control Government officials have been quoted as saying that the Center plans to raise the income limit before any tax is levied. ₹From 3 lakhs ₹5 lakh in the upcoming budget. This change will apply only to those filing returns under the new tax regime.

“In the past, few tax breaks/incentives have been extended to individual taxpayers apart from the new tax regime. So, many believe that this year, the government will at least reduce the exemption rate for individuals to approx. Should be increased. ₹5 lakh,” said Aarti Rawat, Partner, Deloitte India.

Factors Affecting Changes in Income Tax Exemption Limits

A number of factors including economic conditions, government preferences, revenue considerations and political factors affect changes in income tax exemption limits.

Regarding economic conditions, Abhishek Soni, CEO and co-founder of Tax2win, suggests that if the economy shows signs of recovery or growth, there may be a justification for increasing the income tax exemption limit. This adjustment can reduce the burden on taxpayers and stimulate consumption.

Discussing the government's priorities, Soni noted that the Modi 3.0 administration's decisions, reflected in its policy choices and public statements, will play an important role in determining whether it takes measures such as raising the exemption limit. giving priority.

From a revenue perspective, any change in tax policy should be considered in the light of its impact on government revenue. Soni emphasizes that the government must balance fiscal discipline with the desire to provide relief to taxpayers.

Finally, political considerations, such as upcoming elections or public sentiment, may also influence decisions on tax policies. Soni emphasizes that these factors may influence policymakers' direction on the limits of income tax exemptions.

Revision of Section 80C Extent

There has been no change in the much-needed revision of Section 80C limit since 2014 despite the increase in inflation rate. “This will not only help taxpayers to combat inflation but also encourage savings and investments in key financial instruments like ELSS, Tax Saver FDs, PPF etc. in line with the larger vision of a financially strong and prosperous India. will also activate,” said Clear's founder and CEO. Arkit Gupta.

However, given that the government is trying to encourage taxpayers to adopt a simpler tax regime, there may be a change in 80C, added Aarti Rawat.

Increase in interest deduction limit under section 24(b).

Arkit Gupta suggested that to further promote home ownership, the government should consider increasing the interest deduction limit under Section 24(b) from Rs. 2,00,000 to Rs.3,00,000 This adjustment could offer better incentives to people considering purchasing residential property, bolster personal financial well-being and promote growth in the real estate sector.

Budget 2024: Finance Minister Sita Raman will present the seventh budget in a row.

According to PTI, the Union Budget 2024-25 is expected to be presented in Parliament in the third week of July. On February 1, Finance Minister Nirmala Sitharaman presented the interim budget for 2024-2025 due to an election year. After the election results, Sita Raman will now present her seventh consecutive budget.

Nirmala Sitharaman, who served as a Union minister in 2014 and 2019, was sworn in as a Union cabinet minister in Prime Minister Narendra Modi's new Union Council of Ministers on June 9.