Budget 2024: Decoding for individual taxpayers

Synopsis

Though a significant rejig in the direct tax rates and exemptions was in any case not expected, however, the salaried class was still hopeful to receive some benefit from the Interim Budget to reduce the tax burden.

The Finance Minister presented the Interim Budget 2024 today. The Interim Budget laid focus on Governance, Development and Performance (GDP), giving a new meaning to the old abbreviation.

Though a significant rejig in the direct tax rates and exemptions was in any case not expected, however, the salaried class was still hopeful to receive some benefit from the Interim Budget to reduce the tax burden.

The tax rates continue to remain the same under the now default new tax regime and also under the old tax regime. Currently, under the new tax regime and old tax regime, the basic exemption limits are Rs 3 lakh and Rs 2.5 lakh, respectively; and incomes above Rs 15 lakh and Rs 10 lakh, respectively, are taxed at the highest tax rate. The Interim Budget has proposed no change to the basic exemption limit as well as the tax rates. Accordingly, for income up to Rs 7 lakh (without standard deduction), there is no tax liability under the new tax regime, similar to last year.

Interim Budget on Personal Taxation: What’s in it for you and what’s not

The Finance Minister presented the Interim Budget 2024 today. The Interim Budget laid focus on Governance, Development and Performance (GDP), giving a new meaning to the old abbreviation. Shalini Jain of EY India explains the changes announced in Interim Budget 2024 that can provide relief to India’s salaried class. Watch!

There was an expectation that the Interim Budget, similar to previous budgets, may aim to further incentivise taxpayers to move to the new tax regime and enhance its acceptance. Accordingly, it was expected that certain savings and payments may be allowed as deduction in the new tax regime, including enhancement of limit of standard deduction from salary, however, no changes have been announced to make the new tax regime more attractive.

Further, there is no increase to the deduction limit of Rs 1.5 lakh under Section 80C, which was last increased in 2014 from Rs 1 lakh. Similarly, there is no change to the deduction for interest paid on housing loan.

The Finance Minister stated that while the number of tax return filers swelled to 2.4 times, the average processing time of tax returns reduced from 93 days (FY 2013 -14) to 10 days this year. With the aim to improve ease of living as well as ease of doing business, the Government has committed to improve taxpayer services. With this objective, the Interim Budget provides for withdrawal of unverified / disputed direct tax demands up to INR 25,000 pertaining to financial years up to FY 2009-10 and tax demands up to INR 10,000 for FY 2010-11 to FY 2014-15.

Since some of these old demands have hindered genuine refunds of subsequent years for taxpayers, withdrawal of such tax demands would mitigate the hardships faced by the common man or small taxpayers. According to the Government, the withdrawal is expected to benefit 1 crore taxpayers.

While no change may still be a good change, the salaried class continues to be hopeful of receiving burden-lifting tax incentives in the Final Budget, leaving more disposable income in the hands of the common man.



(The author is Shalini Jain, Tax Partner, People Advisory Services, EY India. Vijayalakshmi PG, Senior tax professional, EY India contributed to this article.)

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

(Your legal guide on estate planning, inheritance, will and more.)

Download The Economic Times News App to get Daily Market Updates & Live Business News.

moreless

Roy Walsh

Related post