Top Income Tax Expectations for Budget 2024: What to Expect from Finance Minister Nirmala Sitharaman’s Union Budget

As the anticipation builds for the Union Budget 2024, all eyes are on Finance Minister Nirmala Sitharaman as she prepares to present the budget on July 23, 2024. The Modi 3.0 government’s Budget is expected to bring relief to salaried, middle class taxpayers, and the common man.

One of the key areas of focus for many taxpayers is the income tax regime. Experts are suggesting several changes that could make the new income tax regime more attractive and beneficial for taxpayers. Here are some of the top expectations and recommendations from experts:

1. Changes in New Income Tax regime: Experts are suggesting rationalizing the income tax rates and slabs to make the regime more attractive. They recommend applying the 30% tax slab for incomes above Rs 20 or Rs 25 lakh, instead of the current Rs 15 lakh threshold.

2. Section 80C: There is an expectation to include Section 80C exemption under the new income tax regime. Experts are also requesting an increase in the limit from Rs 1.5 lakh to Rs 3 lakh to encourage savings.

3. Standard Deduction: Experts unanimously agree that the standard deduction limit of Rs 50,000 should be increased to Rs 1 lakh to provide more relief to taxpayers.

4. Basic Exemption Limit: To encourage more taxpayers to opt for the new income tax regime, experts recommend increasing the basic exemption limit from Rs 3 lakh to Rs 5 lakh. They also propose raising the limit for tax rebate from Rs 7 lakh to Rs 8 lakh.

5. Section 80TTA for bank interest: Experts believe that the current exemption limit of Rs 10,000 for interest on bank deposits should be increased. They also suggest including term deposits and fixed deposits under this limit.

6. Section 80D for health insurance: Taxpayers are requesting an increase in the health insurance premium deduction under Section 80D from the current limit of Rs 25,000 to Rs 50,000 or even Rs 1 lakh.

7. Housing Loan Deductions: There is a demand to raise the current limit for deduction on interest paid towards housing loan for self-occupied house property from Rs 2 lakh to a minimum of Rs 3 lakh.

8. Rationalize capital gains tax structure: Experts anticipate a streamlined capital gains tax regime with adjustments to tax rates and computation methods.

9. TCS on LRS transactions: Experts recommend lowering the TCS rate from 20% to 10% for amounts sent abroad exceeding 7 lakhs for maintenance purposes.

10. Streamline e-filing: Experts suggest streamlining the online grievance resolution system for income tax return filing to make it more user-friendly and simplify the filing process.

With these expectations and recommendations in mind, taxpayers are eagerly awaiting the Budget 2024 to see how the government addresses their concerns and provides relief in the income tax regime.