Income Tax Budget 2024 Expectations: Will taxpayers under old and new tax regimes receive relief from FM Sitharaman?

Income Tax Budget 2024 Expectations: Changes to the old and new income tax regimes are expected in the upcoming budget. Finance Minister Nirmala Sitharaman will present her seventh Budget on July 23. This would be the first full budget of Modi 3.0. Nirmala Sitharaman will be the first finance minister to present seven consecutive Union Budgets, surpassing Morarji Desai's record of six successive presentations.

Budget 2024: Expectations from FM Sitharaman in the old and new tax regimes

Clear founder and CEO Archit Gupta suggests that with the increasing focus on environmental sustainability, reintroducing deductions under section 80EEB in both tax regimes could significantly encourage taxpayers. This provision allows for a deduction of up to ₹1.5 lakh on the interest paid on loans taken for purchasing electric vehicles.

Regarding the new income tax regime, Gupta proposes revising the tax rate for individuals earning between ₹15 lakh and ₹20 lakh. “Currently set at 30%, lowering this rate to 22%-25% would alleviate the tax burden on taxpayers within this income bracket, providing substantial relief,” suggested Gupta.

Abhishek Soni, CEO and Co-founder of Tax2win commented that tax slabs and rate adjustments might have been necessary for the old regime to ensure they reflected current economic conditions and upheld fairness. "This could involve revising the thresholds at which higher tax rates apply or introducing new brackets to more equitably distribute the tax burden," Soni suggested.

Similarly, Soni pointed out that efforts in the new income tax regime might focus on further simplifying the structure. This could potentially involve expanding the scope of deductions or credits available to taxpayers. "Such enhancements could promote savings or investments, aligning with broader economic goals like fostering entrepreneurship or innovation," Soni elaborated.

New income tax regime slabs

No tax on income up to ₹3 lakh.

Income between ₹3 lakh to ₹6 lakh is taxed at 5% (with rebate under Section 87A).

Income between ₹6 lakh to ₹9 lakh is taxed at 10% (with a rebate under Section 87A on income up to ₹7 lakh).

Income between ₹9 lakh to ₹12 lakh is taxed at 15%.

Income between ₹12 lakh to ₹15 lakh is taxed at 20%.

Income above ₹15 lakh is taxed at 30%.

Old income tax regime slabs

Income up to ₹2.5 lakh is exempt from taxation.

Income between ₹2.5 lakh to ₹5 lakh is taxed at 5%.

Income between ₹5 lakh to ₹10 lakh is taxed at 20%.

Income above ₹10 lakh is taxed at 30%

Budget 2024: Date, time

The Union Budget, presented by FM Nirmala Sitharaman, will commence at 11 AM on July 23 in the Lok Sabha. The budget proceedings will be televised on Parliament's official channels, Doordarshanand Sansad TV, and streamed live on the government's official YouTube channels.

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