Budget 2024: Will the Government Reduce the Burden of Income Tax?

The countdown to Budget 2024 has begun, with Finance Minister Nirmala Sitharaman set to present her seventh budget on July 23rd. This budget is poised to set a new record for the highest budget presentation in India. Ahead of this crucial event, several pressure groups across the country have started voicing their demands. This year, the primary demand revolves around reducing the burden of income tax, particularly aimed at providing relief to the middle class.

Origins of the Demand

Demand for Tax Exemption up to 5 Lakh A prominent body of direct tax professionals, the All India Federation of Tax Practitioners (AIFTP), has urged the government to raise the income tax exemption limit to five lakh rupees. Narayan Jain, President of AIFTP, emphasized simplifying tax structures to ease compliance and support the middle class.

Proposed Tax Slabs Jain proposed a revised tax structure: 10% on income between five to ten lakh rupees, 20% on ten to twenty lakh rupees, and 25% on income exceeding twenty lakh rupees. He argued for the abolition of surcharges and cess, stressing that these should not burden taxpayers further without clear benefits in education and healthcare.

Calls for Rate Reduction In his memorandum, Jain also highlighted Section 115BBA, which currently levies a 75% tax rate on cash credits, loans, investments, and expenditures increased during demonetization. He advocated for reducing this rate to its original 30%.

Anticipation Surrounding Budget 2024

With expectations running high, the Finance Minister’s upcoming budget is anticipated to address significant announcements, potentially focusing on rural economy support and agricultural reforms. As the nation awaits July 23rd, all eyes are on the government to see how it responds to these critical demands and shapes the economic landscape for the coming fiscal year.