The upcoming Union Budget for 2024 is generating expectations and speculations, especially regarding potential tax relief measures that could benefit salaried taxpayers. Here are the key points and expectations highlighted by experts and consultancy firms like EY:
1. **Doubling Standard Deduction**: EY has proposed increasing the standard deduction limit from the current Rs 50,000 to Rs 1 lakh. This move is aimed at reducing the tax burden on salaried individuals, making the tax regime more attractive under the concessional tax structure.
2. **Raising Basic Exemption Limit**: Another suggestion from EY is to raise the basic exemption limit from Rs 3 lakh to Rs 3.5 lakh. This adjustment would further alleviate the tax liability for individual taxpayers, especially those in lower income brackets.
3. **Simplifying Tax Deducted at Source (TDS)**: EY has highlighted the complexity of the current TDS structure, which involves 33 sections with varying rates. They recommend simplifying these rates by consolidating categories and creating a small "negative list" of non-liable payments for TDS. This simplification could significantly reduce compliance burdens for taxpayers and streamline processes.
4. **Enhancing Taxation Reforms**: The consultancy firm emphasizes the importance of maintaining stability in corporate tax rates, rationalizing TDS provisions, and improving dispute resolution mechanisms. These reforms are crucial for fostering economic growth, encouraging investment, and ensuring a conducive business environment.
5. **Budget Expectations**: Taxpayers and analysts are eagerly anticipating positive tax relief measures in the upcoming budget. Reports suggest that the government may consider rationalizing tax slabs or raising the basic exemption limit to provide relief to individual taxpayers.
6. **Government's Approach**: As Finance Minister Nirmala Sitharaman prepares to present the budget, which is expected around July 22 or 23, 2024, there is anticipation that it will include measures aimed at stimulating consumption, bolstering demand, and supporting economic resilience.
In summary, the proposed changes in the Union Budget 2024, particularly the increase in the standard deduction and basic exemption limits, are aimed at reducing the tax burden on salaried individuals and simplifying tax compliance, thereby fostering a more taxpayer-friendly environment and supporting economic growth.
