A Comprehensive List of Relief Measures Expected from Budget 2024
As we gear up for the interim budget announcement on February 1, 2024, by Union Minister Nirmala Sitharaman, taxpayers eagerly await potential amendments that could impact their financial landscape. Although interim budgets typically avoid major tax changes, there’s anticipation for some relief measures, especially for individual taxpayers. Here’s a breakdown of the key expectations:
Reduction in Tax Rates
To encourage more taxpayers to opt for the new tax regime, it is speculated that the government might further lower tax rates. A significant boost for the middle class could come in the form of increasing the basic threshold from the existing Rs 3,00,000 to Rs 5,00,000.
Standard Deduction Increase
Acknowledging the absence of many deductions in the new tax regime, there’s a hope for an increase in the standard deduction limit from INR 50,000 to INR 1,00,000. This adjustment aims to align salaried taxpayers with those earning income from business or professions, who enjoy various expense-related deductions.
Incentives for Health Insurance and Pension Benefits
Given the importance of health insurance and pension savings, especially in the organized sector, expectations are high for the government to rationalize tax slabs or include deductions in the new tax regime. This move would incentivize individuals to save for healthcare and retirement without compromising the simplicity of the tax system.
Simplifying Withholding Tax Provisions
With over thirty sections in the Income Tax Act for deducting TDS, concerns have been raised about complexity and potential conflicts. A review of the TDS regime is expected, with a focus on simplifying withholding tax-related provisions, such as the distinction between fees for technical services and professional services.
Extension of Revised Return Timelines
The Finance Act 2021 reduced the timelines for filing belated and revised tax returns. However, a plea for an extension is made for situations involving overseas income. Individuals dealing with foreign taxes may face challenges as different countries follow different tax years, making it difficult to gather necessary information by the current deadline.
Eco-Friendly and Welfare-Related Amendments
In alignment with the government’s commitment to environmental sustainability and taxpayer welfare, some suggestions for Budget 2024 include:
(i) Increase in Time Limit for Sanctioning Electric Vehicle Loans:
Extending the time window for approving loans under Section 80EEB, which offers deductions for interest paid on loans for electric vehicle purchases, can further promote eco-friendly practices.
(ii) Simplification of Capital Gains Tax Regime:
Harmonizing tax rates for various capital assets can simplify the capital gains tax regime, enhancing ease of compliance and administration.
Conclusion
As we await the Union Budget 2024, there is optimism for tax reliefs that could positively impact individual taxpayers. The government’s potential focus on simplification, incentives for savings, and eco-friendly initiatives reflects a holistic approach to fiscal policy. Stay tuned for the official announcements on February 1, 2024, and the potential changes that could shape the financial landscape for the year ahead.
To Access the CBDT Notification No. 16/2024 (Change in ITR-6) CLICK HERE
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