Expectation of Salaried Taxpayers from Budget 2024
As Finance Minister Nirmala Sitharaman prepares to present the budget for the fiscal year 2024-25 on February 1, 2024, salaried taxpayers are eager to see how it might impact their finances. Although the upcoming budget is expected to be an interim one due to the impending Lok Sabha elections, there are several expectations and hopes from taxpayers. In this article, we explore the potential areas where salaried individuals are looking for relief and improvements.
Rationalization of Slab Rates
Many taxpayers anticipate a revision in income tax slab rates to make them more progressive and reasonable. This could potentially result in reduced taxes for the middle-income group. Additionally, there is hope for an extension of relief provided under the new tax regime to the old tax regime, addressing concerns about surcharge rates.
Expansion of HRA Tax Exemption
Salaried individuals are looking for an expansion of the list of cities eligible for the 50% House Rent Allowance (HRA) tax exemption. The inclusion of more tier-2 cities in the list of metro cities for HRA exemption calculation is a key expectation.
Increase in Deductions
(a) Health Insurance Premium (Section 80D):
With the rise in healthcare costs, there is a demand to increase the limits of deduction on health insurance premiums under Section 80D of the Income Tax Act.
(b) Section 80C:
Taxpayers hope for a raise in the deduction limit under Section 80C to provide relief to the middle class, considering the long-standing limit of INR 1.5 lakh.
(c) Standard Deduction:
There is a widespread demand for an increase in standard deduction limits to provide individuals with more disposable income.
(d) Interest on Saving Bank Accounts (Section 80TTA):
There is a suggestion to include interest on various types of bank deposits, like fixed deposits, under Section 80TTA, with a possible threshold increase from INR 10,000 to INR 50,000.
Rationalization of New Tax Regime
Taxpayers are looking for the extension of deductions available in the older tax regime, such as health insurance and NPS contributions, to the new tax regime. This would promote equitable access to healthcare and encourage savings and investments.
Increase in Deduction Limit for Loss on House Property
There is a call for enhancing the limit for claiming deductions against self-occupied property from INR 2 lakh to INR 3 lakh, considering the average cost of a flat and housing loan sizes.
Conclusion
While the upcoming budget is expected to be interim, taxpayers are hopeful that the suggested measures, if implemented, would provide much-needed relief and help in efficient financial management. As the budget unfolds, salaried individuals await decisions that could impact their tax liabilities and financial well-being.
To Know the Income Tax Deductions Available to Individuals in FY 2023-24 CLICK HERE
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