The upcoming budget under Finance Minister Nirmala Sitharaman is anticipated to bring several tax relief measures for salaried taxpayers, aiming to boost consumption and ease financial burdens. Here’s a breakdown of the expected measures:
1. **Income Tax Thresholds:**
  Experts propose raising income tax thresholds to provide relief to taxpayers:
  - Income below Rs. 5 lakh: Exempt from tax
  - Income between Rs. 5 lakh to Rs. 12 lakh: Taxed at 10%
  - Income between Rs. 12 lakh to Rs. 20 lakh: Taxed at 20%
  - Income above Rs. 20 lakh: Taxed at the highest slab of 30%
2. **Section 80C Limit:**
  There’s a call to increase the deduction limit under Section 80C:
  - Current limit of Rs. 1.5 lakh could be raised to Rs. 2 lakh or even Rs. 2.5 lakh.
  - This increase would encourage more savings and help mitigate inflationary pressures.
3. **Standard Deduction:**
  - The current standard deduction of Rs. 50,000 is suggested to be increased.
  - This adjustment would provide relief to taxpayers amidst rising inflation and stagnant salary increases.
4. **Housing Loan Deduction:**
  - There’s a proposal to raise the interest deduction on housing loans from the current cap of Rs. 2 lakh to Rs. 3 lakh.
  - This change is seen as crucial given the escalating housing costs, especially in urban areas.
5. **Simplification of Capital Gains Tax:**
  - The complexity of capital gains tax could be simplified by rationalizing tax rates and streamlining eligibility criteria for deductions.
  - This simplification would reduce compliance burdens and enhance clarity for taxpayers dealing with capital assets.
Overall, these anticipated measures aim to provide significant relief to salaried taxpayers, boost savings, and stimulate consumption. They also align with the government’s goal of consolidating fiscal deficit targets while supporting economic recovery and stability. The details of these measures will be clearer once the budget is officially presented, but they reflect the government's strategy to support middle-class taxpayers amid economic challenges.
