Budget 2024 Income Tax: How Income Taxpayers Can Be Given Tax Relief – Top Steps for FM Sitharaman to Consider-As the Union Budget 2024 approaches, taxpayers are eagerly awaiting potential relief measures that could be announced by Finance Minister Nirmala Sitharaman. Given that this year’s budget is an interim one, expectations are high despite the usual limited scope of interim budgets. In the previous budget, the government introduced the New Tax Regime (NTR), aiming to simplify the tax structure by encouraging taxpayers to forgo certain exemptions and deductions.
Budget 2024 Income Tax: How Income Taxpayers Can Be Given Tax Relief – Top Steps for FM Sitharaman to Consider
Current Tax Regimes
Before delving into the expectations, let’s briefly understand the existing tax regimes – the NTR and the Old Regime. The government’s decision to make the NTR the default regime suggests an eventual convergence of the two regimes. However, until that happens, taxpayers in the Old Regime are holding onto their expectations from the budget.
Wish List of Taxpayers
The wish list of those in the Old Regime includes raising the basic exemption limit to match the NTR and reducing the surcharge to align with international standards. The hope is that the government considers these measures, even if not in the interim budget, in the upcoming full-year budget.
Salaried Taxpayers’ Concerns
Salaried taxpayers, who form a significant portion of the workforce, have specific concerns. They seek an increase in the standard deduction, which currently stands at Rs 50,000. Considering the rising cost of living, a revision is warranted, and there’s a call for automatic adjustments linked to the cost inflation factor. Moreover, with the prevalence of the work-from-home model, taxpayers expect a separate deduction for expenses related to home-based work.
Health and Wellbeing Deductions
The post-COVID-19 scenario has emphasized the need for higher medical insurance coverage. Taxpayers propose an increase in the deduction limit for medical insurance, especially for senior citizens. This not only addresses the rising costs of healthcare but also encourages individuals to prioritize their health.
Housing Sector Considerations
Housing remains a crucial aspect for every family. Taxpayers advocate for an increase in the deduction for housing loan interest, currently capped at Rs. 200,000, to Rs. 300,000. This aligns with the government’s goal of providing affordable housing and serves as an incentive for individuals to invest in their homes.
Electric Vehicles Incentives
In line with India’s commitment to net zero emissions, there’s a call for extending the deduction under Section 80EEB for interest on loans for electric vehicles beyond the current deadline of March 31, 2023. This not only supports environmental goals but also encourages taxpayers to embrace eco-friendly transportation options.
Retirement Planning Deductions
Considering India’s young population, reinstating deductions under Section 80C and 80CCD for retirement planning becomes crucial. Encouraging citizens to save for their retirement ensures social security and contributes to a balanced future for the country.
Simplifying Capital Gains Taxation
The current method of taxing capital gains is complex, involving different rates and holding periods for various assets. Simplifying this process would ease the burden on taxpayers, especially with the growing interest in the capital market.
Taxation of Real Income
One notable expectation is to tax only the real income, eliminating provisions where taxpayers pay taxes on notional income. Addressing scenarios like vacant self-occupied properties would contribute to a fairer taxation system.
Stock Options Taxation
The taxation of stock options, particularly in startups, is currently multi-staged and creates cash flow hardships for employees. Advocates propose a return to the single-point taxation system at the time of sale, aligning with the unique challenges faced by startups in managing capital.
Aligning with India’s Growth Story
While the budget’s impact is yet to be seen, the expectations align with India’s ongoing growth narrative. As the country progresses, it is imperative to address the concerns of taxpayers and provide a conducive environment for economic development.
Conclusion
In conclusion, the expectations for Budget 2024 reflect the collective aspirations of taxpayers. Addressing these concerns would not only provide immediate relief but also contribute to long-term economic stability. As we await the budget announcement, there’s optimism that the government will consider the concerns and pave the way for a brighter financial future.
FAQs
- Will the basic exemption limit be increased in the upcoming budget?
- While it’s a common expectation, the final decision will depend on the government’s fiscal considerations.
- Is there hope for simplification in capital gains taxation?
- Taxpayers are optimistic about the government’s commitment to simplifying tax structures, but the details remain uncertain.
- Are there any proposals for incentivizing electric vehicle purchases?
- Yes, taxpayers are urging an extension of deductions for electric vehicles beyond the current deadline.
- Will the government reintroduce deductions for retirement planning under the new tax regime?
- The possibility remains uncertain, but there is a strong case for reintroducing such deductions.
- Is there any indication of changes in stock options taxation?
- Taxpayers are hoping for a return to a single-point taxation system to address cash flow challenges.
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