We are just one day away from the presentation of interim budget 2024. India¡¯s FM Sitharaman will present the budget for the sixth time, with just a couple of months left for the nation to go into elections.
Among the many expectations that taxpayers must be having in their interim budget wishlist, is the relief from income tax, whether you chose the old or new regime. Here are some of the expected changes that FM Sitharaman may announce for old and new tax regimes in the upcoming interim budget 2024 on February 1:
The new tax regime provides favourable results for taxpayers up to an income level of Rs 7,50,000. To increase acceptance for new tax regime, the government should allow deductions under this regime, for say employee¡¯s contribution to PF (under Section 80C) and employee¡¯s contribution to NPS (under Section 80CCD). This would also promote the habit of building a retirement corpus for individuals.?
Other benefits under old tax regime can also be extended to new regime either partially or entirely.
Income upto Rs 5 lakh is not taxable under old regime, but for new regime, this limit is upto Rs 7 lakh tax slabs. To bring tax slab parity in both regimes, increasing the old regime's Rs 5 lakh tax slab to at par with new regime's Rs 7 lakh is another expectation from interim budget 2024.
Also Read:?Meet Nirmala Sitharaman's Team Behind Interim?Budget 2024
Tax deductions for life insurance premiums, NSC, PPF, ELSS, home loan principal, and other items are already abundant under Section 80C. Thus, increasing the deduction limit from the current threshold of Rs. 1.5 lakh to Rs. 2.5 lakh or Rs. 3 lakh can encourage people to purchase insurance as well as make investments, in addition to providing additional space for the tax benefits of other available tax deductions, like principal on housing loans.
A standard deduction from salary income of Rs 40,000 was introduced by the Finance Act, 2018, and it was raised to Rs 50,000 starting with the 2019¨C20 fiscal year.In this upcoming budget, the government may raise the standard deduction limit from Rs. 50,000 to Rs. 1 lakh.
Experts are of the opinion that there is a case for raising the basic exemption limit under both tax regimes, even though the government increased the tax rebate limit under the new tax regime last year from Rs 5 lakh to Rs 7 lakh.In contrast to the tax rebate, which is available on incomes up to Rs. 5 lakh under the old tax regime and Rs. 7 lakh under the new tax regime, an increase in the basic exemption limit will lower tax obligations for all taxpayers, regardless of their tax slab.
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