New Delhi: Budget 2024 will be keenly watched by taxpayers on July 23, 2024. As things stand now, one of the objectives of Finance Minister Nirmala Sitharaman is going to be how to put some extra cash in the hands of people in the middle and lower ends of the economic pyramid. In any budget exercise, incentives are designed to suit that end since inflation and income stagnation have come to plague these categories of citizens.
Why FM is likely to focus on boosting consumption
Putting more cash in the hands of citizens can work wonders for the economy. The traditional logic: extra cash in the pocket triggers consumption across industries. It raises money for these industries and helps raise the growth rates of both the companies and that of the country’s GDP.
An increase in the demand for goods and services also prompts businesses to employ more people, which puts more money in the hands of a greater number of citizens, creating more consumption, spurring demand in turn.
Agniveer, income tax and more
The finance ministry is reportedly working on incentives aimed at providing relief on these counts:
Personal income tax
Raising the retention period of Agniveers in the defence services from the current level of four years
Boost government support for urban housing to provide fillip to the inherently labour-intensive construction sector.
Will FM provide guaranteed pension under NPS?
In January 2024, the Pension Fund Regulatory and Development Authority (PFRDA) chairman Deepak Mohanty told the media that the government was contemplating the introduction of a Minimum Assured Return Scheme under National Pension System (NPS). This could be one of Finance Minister Nirmala Sitharaman’s major announcements in her Budget speech on July 23, 2024, the Financial Express reported, citing officials. Apart from the poor, the Budget is also likely to provide relief to the middle class who are likely to be “miffed”, according to the report.
Will FM revise standard deduction and HRA norms?
Finance minister Sitharaman has not raised the standard deduction on personal income tax in the past 5 years. This limit of Rs 50,000 could be raised to Rs 75,000. “Discussions are going on to make new personal income tax regime attractive to leave more money in the hands of people,” another official said.
Another measure about which expectation is high is including new cities in the list of cities under the category of “metropolitan cities” which will allow a large number of people to claim higher HRA. Cities such as Hyderabad and Bengaluru are waiting to be included in this list which has only 4 names. “People are complaining of higher cost of living in other large cities. So, the government may expand the number of metropolitan cities to be covered for HRA purposes,” the second official added. Including new cities in this list will allow higher income tax deductions.
Budget 2024 Expectations: When Finance Minister Nirmala Sitharaman presents the first budget of Modi 3.0 government on July 23, 2024, all eyes will be on the relief provided to the pocket of the poor and middle classes. Read on to know the measures being planned. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
