The Monsoon Session of Parliament is set to begin on Monday, with Finance Minister Nirmala Sitharaman ready to present Budget 2024 on July 23. Tax relief measures are always highly anticipated by taxpayers, and Budget 2024 is no exception.
Reports suggest the government aims to boost consumption by putting more money in taxpayers’ hands, raising expectations for tax relief.
Experts predict significant tax relief under the new tax regime. One major change could be increasing the exemption limit to Rs 5 lakh, a need emphasized by many experts.
The basic tax exemption limit was last raised from Rs 2 lakh to Rs 2.5 lakh in the 2014 budget by NDA 1.0. It has remained unchanged for the past decade, despite rising household costs due to increasing fuel prices, inflation, and global economic conditions. During this time, corporate taxpayers enjoyed substantial benefits, including tax rate reductions from 30% to 22%, and in some cases, to 15%. Thus, it is widely expected that NDA 3.0 will increase the basic exemption limit to Rs 5 lakh, much to the relief of salaried taxpayers.
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Salaried taxpayers have not fully embraced the new tax regime. While it may benefit those with incomes below Rs 15 lakh, it lacks inflation adjustments for higher incomes. Consequently, high-income taxpayers prefer the old regime. Introducing a 30% tax rate for incomes above Rs 25 lakh could make the new regime more attractive, promoting both consumption and savings.
To make the new tax regime more appealing, the income tax exemption limit is expected to rise to Rs 5 lakh, and the standard deduction limit may increase to Rs 1 lakh.