Budget 2024 Live Updates Income Tax Changes: Finance Minister Nirmala Sitharaman is all set to present Union Budget for the fiscal year 2024-25 at 11 am today, July 23, 2024. Budget 2024 marks the first full-year budget of the new government, following its re-election for a third term. Hopes are high that Sitharaman will introduce measures aimed at alleviating the financial burden of middle-class taxpayers. Rajeev Singh, Head of Bancassurance, CSB bank says, “The government is expected to focus on supporting personal consumption in this Budget. Consequently, some relief for taxpayers is anticipated.”
The middle-class taxpayers are keenly hoping for an increase in the standard deduction and the basic exemption limit, which would reduce the overall tax burden and leave more disposable income in their hands. This change could significantly enhance their financial stability, especially in light of rising cost of living, believe many experts.
From hiking the standard deduction limit to raising the basic exemption limit in the new tax regime to simplifying the capital gains tax structure, taxpayers and experts are keenly anticipating changes that could have a positive impact on the aam aadmi. Take a look at what taxpayers want from Budget 2024.
Budget 2024 LIVE: Hike in standard deduction limit in the new tax regime?
To make the new tax regime more attractive, the limit of standard deduction should be increased from Rs 50,000 in Budget 2024, believe experts. This will allow taxpayers to have a higher disposable income. S. R. Patnaik, Partner (Head – Taxation), Cyril Amarchand Mangaldas says, “The standard deduction limit should be increased to provide relief to salaried individuals and pensioners, who are the backbone of the economy. With rising inflation and the increased cost of living, the current standard deduction of Rs 50,000 is inadequate. Increasing this limit will directly boost the disposable income of these taxpayers, allowing them to cope better with economic pressures and stimulate consumer spending, thereby benefiting the overall economy.
By how much should the standard deduction be increased in Budget 2024? Even if the government raises the standard deduction limit in Budget 2024, the hike will be moderate, say experts. Kale of Nangia Andersen says, “The best estimation may be that the standard deduction is increased by another Rs 10,000.” Vivek Jalan, Partner, Tax Connect Advisory Services LLP, a multidisciplinary PAN India Consulting Firm says, “Standard deduction for salaried taxpayers may be increased. This will help in more cash flow in hands of salaried class. It will boost consumption and help GDP growth of Country, thus also promoting employment generation to cater to the increased demand. Standard deduction was introduced in 2019 and now it is expected that should increase to at least Rs 75,000.”
Patnaik says, “A suggested increase to Rs 75,000 or even Rs 1,00,000 would be a significant and welcome move.
Budget 2024 LIVE Updates: Hike in basic exemption limit in the new tax regime?
One of the foremost expectations is that Budget 2024 will raise the basic exemption limit in the new tax regime in Budget 2024. At present, the basic exemption limit is set at Rs 2.5 lakh in the old tax regime and Rs 3 lakh in the new tax regime. It is suggested that the government should increase the basic exemption limit to Rs 5 lakh in the new tax regime in Budget 2024. Ankit Jain, Partner, Ved Jain & Associates, “The Finance Minister may consider raising the basic exemption limit under the new tax regime, tackling both rising living costs and its competitiveness with the old regime. This would particularly benefit lower-income earners squeezed by inflation. A higher limit would mean more tax-free income, reducing their overall burden. Consequently it could also possibly incentivize more taxpayers to switch to the potentially simpler new system.”
Kumarmanglam Vijay says, “Budget 2024 presents an opportunity to make significant adjustments to the new tax regime, enhancing its appeal and effectiveness. One of the primary changes could be raising the slab limits, which would reduce the tax burden on the middle class and incentivize more taxpayers to shift from the old tax regime.”
Budget 2024 LIVE Updates: Simplifying capital gains tax regime for investors
The income earned from selling capital assets is subject to capital gains taxation.
The income derived from the transfer of capital assets is taxed under ‘capital gains’. The current provision to determine the taxable value of capital gains and taxes applicable is complex. It has been a longstanding demand of the industry to simplify the capital gains structure in India.
Budget 2024 could simplify capital gains norms by introducing standardised taxation for all asset classes. One simplification could involve standardising taxation across all asset classes.
Anita Basrur, Partner — Direct Tax, Sudit K Parekh & Co. LLP says, “This is one of those recommendations being made by various stakeholders over the years. The current provisions of capital gains taxation under the Income-tax Act are different for different asset classes with varying tax rates and holding periods such as 12 months, 24 months and 36 months. The indexation benefit is applicable only to long-term assets other than listed securities, and separate tax provisions exist for residents and non-residents, as well as Indian and foreign companies.”
Budget 2024 LIVE Updates: Increase deductions for home loan repayment under Section 24
Another prominent expectation from Budget 2024 revolves around increasing the deduction limit available on home loans under Section 24 of the Income-tax Act, 1961.
Section 24 (b) offers a deduction of up to Rs 2 lakh for repayment of your home loan interest every financial year. Atul Monga, CEO & Co-founder, of BASIC Home Loan, says, “Enhance the tax deduction on home loan interest under Section 24 of the Income-tax Act from Rs 2 lakh to Rs 5 lakh in Budget 2024. This can help boost housing demand, particularly for budget homes, which have seen a decline in sales since the pandemic.”
Additionally, the deduction of up to Rs 1.5 lakh per annum for interest on home loans for first-time buyers where the stamp duty value of such property does not exceed Rs 45 lakh, should be reinstated. This benefit expired in March 2022.
“There is a very strong possibility that the income tax slabs will be raised and maybe some more relief will be granted via raising the amount of standard deduction and relief on home loan interests in Budget 2024,” concludes Sanjay Sinha, Founder at Citrus Advisors.
Budget 2024 date, time, and key expectations
What is the date and time of Union Budget 2024?
Union Budget 2024 will be presented on Tuesday, July 23, 2024.
When the Budget will be presented in 2024?
Finance Minister Nirmala Sitharaman will present the Union Budget 2024 on Tuesday, July 23, 2024. She is expected to start her Budget speech from 11 am today.
What are the key expectations of the common man from Budget 2024?
Taxpayers want some major relief from Finance Minister Nirmala Sitharaman in Budget 2024. Some of the key expectations include
1) Hike in standard deduction limit
2) Hike in basic exemption limit under the new regime
3) Simplification of capital gains tax
4) Additional deduction of Rs 50,000 for investing in NPS under the new tax regime
5) Hike in deduction for repaying home loans
How to watch Budget 2024 LIVE?
You can watch the Budget Session of 2024-25 live on The Economic Times website. You can also watch it live on Indian government’s official site for Union Budget — indiabudget.gov.in. You can also watch Sitharaman presenting Budget 2024 on Sansad TV, and other news channels.
