Budget 2024: Potential Changes to Income Tax and How They Could Affect You

The countdown to Budget 2024 has commenced, with Finance Minister Nirmala Sitharaman scheduled to present her 7th budget on July 23rd. This budget presentation is set to break records as the most frequent budget presentation by a Finance Minister in India. Ahead of this event, several pressure groups across the country have started to voice their demands. This time, the demand revolves around reducing the burden of income tax.

Demand for Tax Relief Up to ₹5 Lakhs

A prominent body of direct tax professionals, the All India Federation of Tax Practitioners (AIFTP), has urged the government to increase the tax exemption limit to ₹5 lakhs. They emphasize the need to simplify compliance for taxpayers and provide relief to the middle class.

Proposed Tax Slabs

Narayan Jain, President of AIFTP, suggested a revised tax slab where income between ₹5 lakhs to ₹10 lakhs incurs a 10% tax, ₹10 lakhs to ₹20 lakhs incurs 20%, and income above ₹20 lakhs attracts a 25% tax. Jain, who also heads Kolkata Citizens’ Initiative, argued against retaining surcharges and cesses, claiming they do not transparently contribute to education and health services.

Recommendation for Rate Reduction

In the memorandum, concerns were raised about Section 115BEE, which doubled the tax rate to 75% during demonetization and was subsequently made a surcharge. Jain urged a reduction to the original 30% rate.

Focus on Rural Economy

Anticipation is high that this budget may prioritize announcements benefiting the rural economy and farmers. This indicates a potential government focus on rural economic revival through the upcoming budget.

As the nation awaits Budget 2024, expectations are rife for significant announcements that could impact various sectors and economic stakeholders across India. The Finance Minister’s upcoming budget presentation promises to address critical fiscal policies and initiatives aimed at steering the country towards economic growth and stability.