Budget 2024 Income Tax: Finance Minister Nirmala Sitharaman is going to present the interim budget on 1 February. Like every year, this time too there is hope of relief on personal income tax.
Experts are hopeful that the government may provide relief to salaried class and small taxpayers in the budget. In this budget, the basic exemption limit of tax can be increased from Rs 2.5 lakh to Rs 3.5 lakh. The last change in this was in the year 2014. 10 years ago it was increased from Rs 2 lakh to Rs 2.5 lakh. Some organizations have demanded to increase this limit to Rs 5 lakh.
No change since last 10 years
There has been no change in the existing basic exemption of Rs 2.5 lakh for the last 10 years. The standard deduction of Rs 50,000 was introduced three years ago. This also applies only to the salaried class. If the basic exemption limit is increased then it will save more money in the hands of the middle class. This will also increase consumption and economic growth. If changes are made by the government, it will benefit a large section of around 7 crore tax payers.
Exemption under section 80C
Currently, exemption of up to Rs 1.5 lakh is available under Section 80C of Income Tax. Organizations like the Institute of Chartered Accountants of India are demanding to double this exemption limit. According to them, small savings schemes, insurance policy buyers and mutual fund investors will benefit the most from increasing the limit of 80C. For the last several years, there has been a demand from experts to increase the 80C limit.
Will standard deduction also increase?
Currently, a benefit of Rs 50,000 is available as standard deduction. In view of rising inflation, there is a demand to increase its limit to Rs 70 thousand or Rs 1 lakh. Small tax payers will benefit the most from increasing the standard deduction limit.
Under the new tax regime, the basic exemption limit has been increased from Rs 2.5 lakh to Rs 3 lakh with an increase of Rs 50,000. If you choose the new tax regime for the financial year 2023-24, then it is not necessary to file returns if your taxable income is less than Rs 3 lakh. This change allows those selecting the new tax regime to save up to Rs 15,000 (30% of Rs 50,000) during ITR filing. On the other hand, the old tax regime gives a basic exemption of Rs 2.5 lakh.
