Budget 2024:The government might make things easier for middle-class taxpayers by increasing the basic income threshold from Rs 3,00,000 to Rs 5,00,000. Nirmala Sitharaman, the Union Minister, is set to present the interim budget before the next general elections on February 1, 2024. While interim budgets usually don’t announce major tax changes, some relief is expected for individual taxpayers.
Changes in the Tax System in Budget 2024
To encourage more people to choose the new tax system, the government might lower tax rates. Raising the basic threshold from Rs 3,00,000 to Rs 5,00,000 would especially benefit the middle-class. Since the new tax system doesn’t offer many deductions, it would be fair to increase the standard deduction from INR 50,000 to INR 1,00,000 for salaried taxpayers. This would help them cover various expenses and be on par with those earning income from business or profession.
Importance of Health Insurance and Pension Benefits
Access to health insurance and pension benefits is crucial for many workers. While the old tax system provided deductions to promote this, the new system lacks such incentives. It is hoped that the government adjusts the tax slab/rates or includes deductions in the new system to encourage savings for healthcare and retirement.
Extending Return Filing Timelines
The filing timelines for belated and revised tax returns were shortened in 2021. However, individuals with overseas income subject to tax in India may face challenges due to different tax years in different countries. An extension for filing revised tax returns should be considered to address this practical challenge.
Eco-Friendly and Welfare-Related Changes
In Budget 2024, there are suggestions to promote a healthier environment and welfare of taxpayers:
- Electric Vehicle Loan Time Limit: The time limit for approving loans for electric vehicles should be extended to encourage a greener environment. This benefit should also be extended to the new tax system.
- Simplifying Capital Gains Tax: Harmonizing tax rates on the sale of various assets can make the capital gains tax system simpler and more convenient for taxpayers.
As we look forward to Union Budget 2024, there is optimism for tax reliefs that will benefit individual taxpayers.