Income Tax Changes Coming Soon| How Budget 2024 Will Boost Savings For Middle-Class

Опубликовано: 15 Сентябрь 2024
на канале: NEWS9 Live

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All eyes are on the new Modi government’s first full budget and if you are wondering what’s in it for you, we have you covered. Expectations are that the Finance Minister will lower income tax rates to impress the middle class. Here is all we know so far.

The government wants to focus on middle-class savings and boosting consumption. The Union Budget 2024 is therefore, likely to introduce reforms in the income tax structure with a focus on reducing taxes for lower income brackets, especially for the sub-5 lakh rupee tax bracket.

What can we expect?

Reports indicate that a revision of tax rates in the New Tax Regime maybe announced in the upcoming Budget in July, and that could mean good news for those opting for the New Tax Regime.

Back in 2020, the Union Budget saw the Modi government introduce a new tax regime with lower slabs but without traditional deductions. However, adoption remains issue. A business standard report says the government may introduce additional deductions under the new regime to broaden its appeal.

Remember, Section 80C benefits are not applicable under the new tax regime. There are indications that this benefit may be extended to encourage more taxpayers to opt for it.

Section 80C of the Income-tax Act, 1961 encompass deductions for a range of savings and investments, including LIC, PPF, RPF contributions, and more, annual limit set at Rs 150,000.

Another proposal includes potential enhancements and tax reliefs, by increasing the 80C deduction limit from Rs 150,000 to Rs 200,000 in the old tax regime.

A key proposal under review is increasing the tax-free income limit in the New Tax Regime from Rs 3 lakh to Rs 5 lakh. This way, more disposable income in the hands of taxpayers will encourage them to switch to the new regime.

Some reports also suggest that those earning over Rs 15 lakh annually may see some tax relief in the new tax regime which is presently taxed at 30%. The 15 lakh threshold could be pushed higher, with more taxpayers paying 20% instead of 30% tax.

All eyes are on the Modi 3.0 maiden budget scheduled for presentation in July.

What eventually comes out of the Finance Minister’s budget speech could still be a surprise, but reports indicate inflation and unemployment concerns could become budget priorities and an effort to boost consumption will mean more money in the hands of the common man.

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