Salaried taxpayers of India are waiting with bated breath to see what relief Finance Minister Nirmala Sitharaman offers them in the budget of FY25 that she is supposed to present later this month.
Budget expectations: Tax exemption limit, Standard deduction
Various expert agencies point out that the basic exemption limit of Rs 2.5 lakh for those below 60 years should be raised. Incidentally, it is Rs 3 lakh for those between 60 and 80 years (senior citizens) and for those above 80 (super senior citizens) it is Rs 5 lakh.
The standard deduction of Rs 50,000 should also be raised. It was last raised in 2019. These couple of points were mentioned by EY in its pre-Budget recommendations.
Himadri Mukhopadhyay, secretary, Income Tax Bar Association, Calcutta points out that raising the raising the basic exemption limit from Rs 3 lakh to Rs 4 or 5 lakh and a possible reduction in tax rates would put cash in the hands of taxpayers and spur consumption. “It would, in turn, lead to the much-needed growth in the economy,” he said.
Capital gains tax
Since taxpayers are increasingly adopting mutual funds and market-linked investments, they would also like to see a change in the capital gains taxes. The limit of tax-free ceiling on LTCG on sale of equity shares or equity-oriented mutual funds could be doubled from the existing Rs 1 lakh a year.
Home loan calculation
Real estate is another driver of the economy that has a spillover effect in many sectors such as cement, steel, electrical, paint sanitaryware and decorative items. To boost this sector, deduction limit of interest on housing loans could be raised from the existing limit of Rs 2 lakh a year.
EY has also suggested that the FM should remove the ceiling of Rs 2 lakhs towards the set-off of house property loss against other heads in the same year.
HRA computation
The computation of HRA is a topic that concerns many taxpayers directly. EY also urged the FM to categorise Hyderabad, Pune, Bengaluru, Ahmedabad, Gurgaon as metro cities for HRA exemption calculation. It should be raised from 40% to 50% of basic salary, the agency recommended.
Tax-free gift ceiling
Right now the ceiling value of tax-free gifts is Rs 50,000. It should be doubled, said the expert agency.
Budget 2024 Expectations for salaried employees: Stung by inflation, salaried taxpayers in India are a harassed lot. With buoyancy in direct tax collection, Finance Minister Nirmala Sitharaman has some elbow room for munificence. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
