Every common man and salaried class and middle class is expecting relief from the government from the general budget being presented today. If the government announces exemption from the income tax point of view, then it will provide relief to such people. What can you expect from the budget 2024 of Modi 3.0 government?
Government can make changes in income tax
Experts say that the new income tax system can be made more attractive by rationalizing the income tax slab rates and slabs. They suggest that a 30% tax slab should be applicable on income above Rs 20 or 25 lakh instead of the current limit of Rs 15 lakh.
Section 80C and Standard Deduction
Section 80C exemption is expected to be included under the new income tax system. Let us tell you, there has been no change in the limit of Rs 1.5 lakh since the year 2014, so it is expected to be increased to Rs 3 lakh to encourage savings. Apart from this, there is a demand that the standard deduction limit of Rs 50,000 introduced in the new tax system last year should be increased to Rs 1 lakh.
Basic exemption limit and interest on bank deposits
To encourage more and more taxpayers to opt for the new income tax regime, personal tax experts recommend increasing the basic exemption limit from Rs 3 lakh to Rs 5 lakh. Additionally, some experts propose increasing the tax exemption limit from Rs 7 lakh to Rs 8 lakh. Experts believe that the current exemption limit of Rs 10,000 for interest on bank deposits is inadequate and should be increased.
Section 80D and home loan deduction for health insurance
Salaried class taxpayers are requesting to increase the health insurance premium deduction limit under section 80D from the current limit of Rs 25,000 to Rs 50,000 or Rs 1 lakh. This change will provide relief to taxpayers and motivate them to prioritize their health. People are also demanding that the current limit of deduction on interest paid on housing loan for self-occupied house property should be increased from Rs 2 lakh to a minimum of Rs 3 lakh. Also, it should be included under the new tax system.
Rationalisation of capital gains tax structure
Experts say the government recognises the intricacies of the current capital gains tax structure, which suffers from inconsistencies in tax rates and holding periods for different instruments within the same asset class. The same indexation benefit does not apply uniformly in different scenarios. They anticipate that the government may propose a streamlined capital gains tax regime, which could possibly involve adjustments in tax rates and calculation methods.
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