Income tax Budget 2024 expectations: 5 things salaried taxpayers want from FM Nirmala Sitharaman on July 23

Budget 2024: The salaried class has high expectations for the upcoming budget as there was not much relief for the taxpayers in the interim budget of 2024. Anticipating Budget 2024, substantial tax reforms are expected to provide relief and boost savings for taxpayers, especially the middle class. Personal Finance Experts suggest potential changes such as reducing the highest tax rate in the new tax regime, increasing the standard deduction, and raising the threshold for the highest tax rate in the old tax regime. They anticipate the government will address perceived shortcomings of the new tax regime introduced in Budget 2023, which did not attract the anticipated number of taxpayers.

Expectations of salaried class from upcoming Budget 2024

1)Tax rate reductions

Divya Baweja, Partner, Deloitte India

"While changes provided in Budget 2023 in the new tax regime persuaded taxpayers to switch, the shift is still not as expected. The government is expected to consider reducing the highest tax rate of 30% to 25% under the new tax regime and increase the standard deduction from the current threshold of INR 50,000."

2)Threshold adjustments and deduction Limits

Divya Baweja, Partner, Deloitte India

"Further, the government may also look at increasing the threshold limit for the highest tax rate from INR 10 lakhs to INR 20 lakhs under the old tax regime, and increase the limit of 80C, as an interim measure."

3)Standard deduction enhancements

Garima Tripathi, Partners V Sahai Tripathi and Co, Chartered Accountants

"The upcoming Budget 2024 brings high hopes for the middle class, particularly regarding increased savings under the old tax regime. One key expectation is the Section 80C deduction limit increasefrom the current ₹1.5 lakhs to possibly ₹2.0 lakhs."

CA Abhishek Jain, Partner Kailash Chand Jain & Co:

"An increase in the standard deduction, last revised to ₹50,000, is also expected. This would lower taxable income, providing significant relief amid inflation and rising living costs."

4)Capital gains and investment incentives

Garima Tripathi, Partners V Sahai Tripathi and Co, Chartered Accountants:

"Many people hope that the Long-Term Capital Gains (LTCG) exclusion ceiling will be raised from ₹1 lakh to ₹1.5 or 2 lakhs, given the growing interest in trading."

5)House Rent Allowance (HRA) and other allowances

CA Abhishek Jain, Partner Kailash Chand Jain & Co:

"Key expectations include higher House Rent Allowance (HRA) exemptions to offset rising rental costs, particularly in metropolitan areas. This would reduce taxable income and increase affordability for those living in rented accommodations."

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.