Budget 2024: Demand To Increase Threshold For Various Personal Tax Deductions To Incentivize Savings | Personal Finance News

New Delhi: Ahead of the presentation of the Interim Budget by Finance Minister Nirmala Sitharaman, a lot of anticipation and expectations have been built on the personal taxation front. 

Since this Budget is going to be a vote-on-account/ interim budget,  major announcements are not expected. However, taking cue from the last interim budget presented in 2019 when certain tax proposals were introduced, there is some expectation this time around. Overall, taxpayers hope that the upcoming budget addresses their concerns and provides a much-needed boost to the personal taxation front in India

Akhil Chandna, Partner, Grant Thornton Bharat said that the government could also consider linking the tax slabs to inflation to provide relief to taxpayers from the rising cost of living.

Taxpayers in the lower and middle income category are hopeful for some relief in the form of a reduction in tax rates or an increase in tax slabs. 

“In recent years, the government has taken several steps to simplify the tax structure and make it more taxpayer friendly. The introduction of lower tax rates for individuals under the new tax regime was a welcome move, but it lacked the desired impact due to parity with corresponding deductions and exemptions under old tax regime. Therefore, taxpayers expect the government to strike a balance between lower tax rates under new tax regime or increasing the threshold for various deductions / exemptions to incentivize savings and investments,” Chandna said.

“In case of the old tax regime, there has been an expectation for higher deduction limits such as u/s 80C (PPF, LIC etc.), 80D (health insurance premium), and housing loan interest payments.  Also, the standard deduction applicable under both the tax regimes is expected to be raised to meet the inflation over the last five years,” he added.

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