Income Tax Budget 2024 expectations: With the upcoming Union Budget 2024, taxpayers and financial experts are eager to know if new tax deductions will be introduced or modified. This annual fiscal event significantly influences the financial planning of millions of Indians and sets the direction for the country’s economic journey. Here are some possibilities and their implications:
India’s tax structure currently includes various deductions under different sections of the Income Tax Act. For instance, Section 80C allows deductions up to ₹1.5 lakh for specified investments, promoting savings and providing tax relief. However, introducing the new tax regime in 2020, with lower tax rates but fewer deductions, added complexity.
According to Nidhi Aggarwal, founder of SpaceMantra, “The coexistence of old and new tax regimes has created complexity. While the new regime offers simplicity, many taxpayers still value deductions. The upcoming budget must address this and provide clear incentives for long-term financial planning.”
Siddharth Maurya, Founder and Managing Director of Vibhavangal Anukulakara Pvt. Ltd., suggests potential new deductions aligned with evolving societal needs: “The government has an opportunity to redesign tax incentives to reflect current times. Introducing deductions for areas like mental health or sustainable living offers financial relief and encourages behaviours beneficial to society.”
There is also anticipation regarding the tightening or rationalisation of existing deductions to simplify the tax structure or increase revenue:
Section 80C: The current ₹1.5 lakh limit has remained unchanged for years, and calls have been made for its increase and the rationalization of eligible instruments.
Interest on housing loans: Deductions on interest payments, currently capped at ₹2 lakh for self-occupied properties, may see adjustments.
Standard Deduction: This flat relief measure for salaried individuals could be reviewed.
Equities: Changes in long-term capital gains tax on equity investments, reintroduced in 2018, might also be considered.
Gaurav Singh Parmar, Associate Director at Fincorpit Consulting, emphasizes the need for relevant deductions that do not inadvertently lead to tax avoidance: “While supporting savings and investments through deductions, the government must ensure they remain appropriate. Adjustments to eligibility criteria or deduction limits may be necessary to balance taxpayer relief and maintaining a robust tax base.”
FM Sitharaman likely to present Full Budget on July 24
Finance Minister Nirmala Sitharaman is expected to potentially present the full Budget for 2024-25 during the Monsoon Session of Parliament on July 24, Financial Express. reported. However, the report noted that the final decision on the dates is pending and expected to be announced shortly.
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