The upcoming Union Budget 2024, set to be presented by Finance Minister Nirmala Sitharaman on July 23, has generated significant interest among the salaried class. Expectations are high for announcements that could lead to tax reductions and reforms aimed at optimizing the taxation process.
Key Expectations from the Union Budget 2024
- Adjustment of Tax Slabs
One major anticipation is the revision of income tax slab rates. The salaried class hopes this adjustment will create a more equitable tax system and potentially lower the tax burden for the middle-income group. The new tax regime has already reduced the maximum surcharge rate from 37% to 25%, and there are expectations that these benefits could extend to the old tax framework as well. - Revamp of Section 80C
Another significant expectation is the increase in the deduction limit under Section 80C of the Income Tax Act. Currently capped at ₹1.5 lakh, there is a strong demand for this limit to be raised to at least ₹2 lakh to provide relief to taxpayers amidst rising living costs. - Increase in Standard Deduction
Since the standard deduction was increased to ₹50,000 in the Interim Budget 2019, there is speculation that it might be further raised to ₹1 lakh annually in the upcoming budget. - New Tax Regime Rejig
There is also interest in potential reforms to the new tax regime, particularly regarding the extension of tax deductions for health insurance and NPS contributions. These changes could encourage financial planning and improve access to healthcare. - Old Tax Regime Adjustments
Expectations include significant improvements to the old tax regime, such as increasing the income tax exemption limit to ₹5 lakh to align with the new tax regime. This move would aim to simplify tax slabs and reduce rates for taxpayers. - Hike in HRA
The salaried class is hopeful for a revision in House Rent Allowance (HRA) rules. Currently, HRA exemptions are available at a 50% rate for four major cities and 40% for others. There is a growing demand to extend the 50% exemption rate to cities like Bengaluru, Hyderabad, Gurgaon, and Pune. - Raising Threshold for Section 80TTA
Finally, there is a call for increasing the threshold for Section 80TTA from ₹10,000 to ₹50,000 to include interest from various bank deposits, which would benefit many salaried individuals.
As the budget announcement approaches, these expectations reflect the salaried class’s hopes for measures that could ease financial pressures and support personal investments.