Jul 18, 2024 02:29 PM IST
Budget 2024: Finance minister may announce potential changes in income tax rates, standard deduction, and Section 80C exemptions in upcoming Budget.
Finance minister Nirmala Sitharaman is set to present the Union Budget on July 23. Taxpayers are expecting a potential hike in standard deduction, relief in income tax rates and an increase in Section 80C exemptions in the Budget. Experts believe that adjustments to income tax slab rates could be seen in the Budget as the Finance Minister might announce tax reductions. You can expect these 6 income tax related changes in the Budget:
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Standard deduction: The standard deduction was first introduced at ₹40,000 in the 2018 budget. It was subsequently raised to ₹50,000 in the 2019 budget and has not been altered since.
Section 80C exemption: Salaried persons can use Section 80C exemptions to reduce their taxable income by ₹1.5 lakh in a fiscal year. It has remained unchanged since 2014 but a revision is expected in the same.
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Income tax exemption limit: The Finance minister may increase the income threshold before imposing any tax from ₹3 lakh to ₹5 lakh in the upcoming budget. This will specifically affect taxpayers filing under the new tax regime.
National Pension System: There may be changes in the National Pension System (NPS) like raising the additional income tax deduction limit under Sec 80CCD 1B.
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Tax rate reductions: The government may consider lowering the top tax rate from 30% to 25% within the new tax regime. The Finance minister may also raise the threshold for the highest tax rate from ₹10 lakh to ₹20 lakh under the old tax regime, experts have said.
House Rent Allowance (HRA): There may be increased House Rent Allowance (HRA) exemptions in the Budget which are likely to mitigate the impact of escalating rental expenses, especially in urban areas.
