Speculations abound regarding potential tax relief measures, as the Union Budget for 2024-25 is anticipated to be presented in the latter part of July.
There is considerable discourse on the prospect of rationalizing tax slabs within the old income tax regime and enhancing exemption thresholds in the new regime. These discussions have sparked optimism among taxpayers.
Senior government officials have hinted at the contemplation of tax relief initiatives aimed at bolstering consumption and demand without expanding welfare expenditures.
While this approach holds promise, some experts remain cautious about reports suggesting adjustments to tax slabs and increased exemption limits.
Aditya Khemka, Fund Manager at InCred Asset Management, recently conveyed to The Economic Times that the upcoming full budget in July could potentially lean towards populism compared to the interim budget.
He indicated that populist measures might focus on incentivizing the manufacturing sector and augmenting social spending in rural India to stimulate consumption. Nonetheless, Khemka does not foresee any drastic alterations in tax policies.
Conversely, certain economists speculate that the government might introduce tax reliefs or incentives, pointing out the prolonged absence of such measures.
There is speculation about potential increases in the basic income tax exemption limit for both regimes, potentially up to Rs 5 lakh. Additionally, there are calls for introducing basic tax deductions in the new income tax regime to encourage its adoption.
To sum up, Finance Minister Nirmala Sitharaman may introduce incremental adjustments in income tax policies, but significant overhauls are unlikely.
The government's commitment to maintaining policy continuity and fiscal prudence suggests that while some tax relief measures may materialize, sweeping reforms are not on the horizon.
The Union Budget for 2024-25 is expected to be presented by FM Sitharaman in the latter part of July, setting the stage for the unveiling of fiscal priorities and economic strategies for the upcoming year.
