Budget 2024 : What common Taxpayers should expect from Finance Minister: Is the Central Government's budget to be presented on February 1 going to bring any big good news or relief for the common taxpayers this time? This question is because even before the presentation of the budget, the election atmosphere has been completely created in the country. In such a situation, it should not be surprising if common voters expect the Finance Minister to present an election budget.
What should the common taxpayer expect?
Finance Minister Nirmala Sitharaman had said some time ago that since it is an interim budget, there will be no major announcements this time. But the way Prime Minister Narendra Modi himself, after returning to Delhi after consecration in Ayodhya, made the ambition of installing solar panels on the roofs of 1 crore houses. Pradhan Mantri Suryoday Yojana (Pradhanmantri Suryodaya Yojana) was announced, it is indicating that some more big announcements can also be made before the elections. Anyway, Modi government is known for taking out-of-the-box decisions. For example, in the interim budget presented before the 2019 Lok Sabha elections, the government had made many big announcements for individual taxpayers, from increase in standard deduction to full tax rebate of Rs 12,500. Therefore, this time also if the common taxpayer expects a shower of gifts from the government during the election season, then what is wrong in it? So let's take a look at the relief that common individual taxpayers are expecting from this Union Budget (Union Budget 2024) in terms of Income Tax.
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Change in income tax slab and rate
There has been no change in the income tax slabs and rates of the old tax regime since 2014. However, the cost of all essential things has increased significantly in these 10 years. These essential things include food items, medicines, electricity, transport and loan costs. This is the reason why taxpayers are expecting relief in tax slabs and rates this time. It remains to be seen whether the government pleases the voters in this matter in the election year or their wait remains incomplete.
Standard deduction limit should be increased
The standard deduction for the salaried class was reintroduced by the Modi government in 2018 and in the interim budget of 2019, it was increased from Rs 40 thousand to Rs 50 thousand. After that, keeping in mind the decline in the value of rupee due to inflation in the last 5 years, it has become absolutely necessary to increase the standard deduction.
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Tax saving investment limit increased
The maximum limit for tax-saving investment under Section 80C of the Income Tax Act is Rs 1.5 lakh, which was last increased 10 years ago. Children's school fees are also included in this limit of Rs 1.5 lakh. Now the demand to increase this limit to Rs 2.5 lakh is gaining momentum. In view of the huge increase in the expenditure on children's education, there is a demand to give a separate deduction on it like health insurance. After Covid-19, treatment expenses and health insurance premiums have increased significantly, hence the demand to increase the limit of tax exemption on these is also gaining momentum.
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Deduction on home loan interest should be increased
There is an annual limit of Rs 2 lakh on income tax deduction on home loan interest, which has not been changed since 2014. Whereas house prices have increased tremendously in these 10 years. The increase in interest rates has made this limit even more inadequate. Therefore, this limit should be increased to at least Rs 4 lakh.
Increase in limits of HRA, transport and LTA
Despite the sharp increase in house rent and transport expenses, the tax-free limit of allowances related to these has not increased since 2017. Therefore, to do justice to the taxpayers, it is necessary to increase the tax free limit of all these allowances.
Can big announcements be made in the interim budget?
Amidst all these demands, this question can also be raised whether the government can make important announcements related to tax in the interim budget i.e. vote-on-account? It is true that for decades there has been a tradition of not making major announcements in the interim budget before the elections. But the Model Code of Conduct of Elections i.e. Model Code of Conduct comes into force after the announcement of the election programme. Before that, there is no constitutional bar on any government making changes in tax provisions through the budget. After all, the government had done this in the pre-election interim budget of 2019 too!