New Delhi: Budget 2024 is expected to be a big-bang Budget on account of this being Finance minister Nirmala Sitharaman’s 7th straight Budget and the first for Modi government 3.0. Taxpayers are seeking some relief from the finance minister in Budget 2024 amid rising prices of vegetables and houses.
All eyes will be on whether Finance minister Sitharaman will be able to offer relief under the new tax regime or a higher standard deduction under the Income Tax Act.
According to S. Sriram, Partner at Lakshmikumaran & Sridharan Attorneys, the finance minister may offer direct or indirect tax benefits to homeowners. Direct tax benefits include:
Tax deduction for housing loan interest paid
Lower taxation on rental income
Further, indirect tax benefits may be offered to home-owners in the form of:
Tax incentives for developers
Incentive for higher rental yield by way of an improvement in infrastructure
“There is a larger ask from home buyers – to increase the limit on interest expenses, to prove deduction for loan principal repayment, among other demands,” said Sriram. He also highlighted the restriction on tax exemption when it comes to reinvesting proceeds from a property sale to only one house. Further, no tax exemptions are allowed if a house is purchased outside India, added Sriram.
On the infrastructure development front, Sriram said that in the past tax incentives to flat and infrastructure developers helped to sprout many new housing communities outside traditional city limits. However, these incentives are not available anymore, he added.
How to leave more money in taxpayers’ hands
Motia Group Director LC Mittal said a hike in the tax exemption limit to Rs 5 lakh from the current Rs 2.5 lakh cap is likely to benefit nearly 75 per cent of taxpayers in India. The average middle-class taxpayer may also benefit from a reduction in the 20 per cent tax slab on incomes in the Rs 5-10 lakh range to 15 per cent. This is likely to leave more money in the hands of taxpayers up to Rs 50,000 per annum, added Mittal.
Indexation benefits and raise in exemption ceiling
Vibhavangal Anukulakara Founder and MD Managing Director Siddharth Maurya said a reduction in tax surcharges to 4 from 6 may provide significant relief to taxpayers. It is advisable to raise the exemption limit to Rs 20 lakh from Rs 10 lakh for the 30 per cent tax slab, he added. An inflation indexation on tax slabs will help taxpayers by boosting their take-home income by up to 5-7 per cent, added Maurya. This is likely to translate into average annual savings of Rs 30,000-40,000 for taxpayers, he said.
Budget 2024 expectations: From tax breaks on property purchase to an expansion of the tax exemption ceiling, experts weigh in on the possibilities that finance minister Nirmala Sitharaman may explore to provide personal income tax relief to taxpayers. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
