Union Budget 2024: The finance ministry is reportedly considering raising the standard deduction limit for income taxpayers under the new tax regime while leaving the tax exemption-heavy old regime unchanged.
According to a report by Moneycontrol, the finance minister may consider increasing the standard deduction to up to Rs 1 lakh per annum in the upcoming budget.
Also Read: Budget 2024: Will Govt Hike Rs 1.5 Lakh Limit Under Section 80C Of Income Tax Act?
To boost disposable income in the hands of taxpayers, the government may increase the standard deduction amount from Rs 50,000 to Rs 1 lakh, the report said, quoting industry experts.
According to another report by ToI, the finance ministry is considering raising the standard deduction limit for income taxpayers under the new regime while keeping the tax exemption-heavy old regime unchanged.
Furthermore, the rebate under Section 87A was increased for taxable incomes up to Rs 7 lakh under the new tax regime. Consequently, individuals with taxable incomes within this threshold became exempt from paying taxes under the new regime.
The Rs 50,000 Standard Deduction
In the 2023 budget, the finance minister introduced a standard deduction of Rs 50,000 for salaried taxpayers and pensioners under the new tax regime. This deduction became the default option unless taxpayers chose to opt-out.
Will Govt Hike Rs 1.5 Lakh Limit Under Section 80C Of Income Tax Act?
Each year, numerous taxpayers anticipate the finance minister increasing the Section 80C limit in the union budget 2024. The current 80C limit has not kept pace with rising incomes and expenses, leading many taxpayers to exhaust the entire limit.
There has been no official announcement regarding an increase in the Section 80C deduction limit for budget 2024. The current limit of Rs. 1.5 lakh has remained unchanged since 2014. Due to rising inflation, many taxpayers and financial experts expect an increase.
Section 80C, a provision under the Income Tax Act of India, allows taxpayers to claim deductions on certain investments and expenses, thereby reducing their taxable income. The maximum deduction limit under Section 80C is Rs 1.5 lakh per financial year.
Tax Limit Expected To Be Increased?
The government is reportedly considering measures to potentially reduce personal income tax rates to bolster GDP growth by stimulating consumption, especially given the subdued spending levels among the middle class.
In the forthcoming budget, the government plans to raise the income threshold for tax liability from the current Rs 3 lakh to Rs 5 lakh.
This adjustment is aimed exclusively at taxpayers under the new regime, to increase disposable income, particularly among lower-income groups.
Budget 2024 Date July Month: The Union Budget 2024 is expected to be presented on July 23/24, 2024. This full budget will be for the fiscal year 2024-2025.
ITR Filing Last Date 2024: For the financial year 2023-24 (Assessment Year 2024-25), the last date to file ITR without penalty is July 31, 2024.
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