Budget 2024: 5 Top Income Tax Changes Expected

The much-anticipated Budget 2024 is set to be presented by Finance Minister Nirmala Sitharaman in Parliament on July 23, 2024. This budget is expected to focus on income tax relief while supporting economic initiatives and maintaining fiscal responsibility in line with the Viksit Bharat 2047 Vision.

1. Increase in Exemption Limit

One of the primary expectations from Budget 2024 is an increase in the exemption limit under the new tax regime. Currently, the exemption limit is Rs 3 lakh, meaning income up to this amount is not taxed. There is significant anticipation that this limit will be raised to Rs 5 lakh, providing substantial relief to taxpayers. An increased exemption limit could make the new tax regime more attractive and enhance personal finances.

2. Tax Slab Rationalisation

Another significant change expected is the rationalisation of tax slabs. Currently, individuals earning between Rs 12-15 lakh annually are taxed at 20%, and those earning Rs 15 lakh and above are taxed at 30%. Many argue that these rates should be adjusted. There is a call to apply the 30% rate only to individuals earning Rs 30 lakh per year and to revise the 15% rate for those earning Rs 9-12 lakh annually. These adjustments could make the tax system fairer.

3. Standard Deduction Boost

Currently, the standard deduction is set at Rs 50,000. Experts believe this could be increased to Rs 1,00,000 to provide additional tax relief. A higher standard deduction would mean more tax savings for individuals and could alleviate financial pressure for many taxpayers.

4. Capital Gains Tax Rationalisation

Changes are also anticipated in capital gains tax. Investors have long sought a more balanced approach. Adjustments in this area could influence market dynamics significantly. If the government increases this tax significantly, it could lead to a notable market correction.

5. Overall Tax Relief

Overall, there is a strong expectation that Budget 2024 will include measures to provide tax relief and make the new income tax regime more appealing. The government’s approach will likely focus on encouraging consumption, maintaining fiscal prudence, and investing in infrastructure and other growth-supporting initiatives.

As we await the Budget presentation on July 23, 2024, it remains to be seen which of these expected changes will be included. These potential tax changes are eagerly anticipated as they could have a significant impact on personal finances and the broader economic landscape.

Aakhir Tak Editor-in-Chief

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