Just a week is left for Finance Minister Nirmala Sitharaman would present her seventh budget in the Lok Sabha on July 23, 2024. While the clamour of revision in personal Income Tax is growing across India, the latest voice to add to the chorus is that of All India Federation of Tax Practitioners (AIFTP).
AIFTP president Narayan Jain urged the government on July 14 that the government should immediately raise the basic exemption limit to Rs 5 lakh for non-senior citizens.
Budget Expectation: Focus on basic exemption limit
As the name implies, basic exemption limits are not based on the income of a person but on his/her age. Currently, the basic exemption limit stands at Rs 2.5 lakh for those under 60 years of age. It is Rs 3 lakh for those between 60 and 80 and Rs 5 lakh for those above 80 ie, who are called super senior citizens.
Without a doubt, raising the basic exemption limit from Rs 3 lakh to Rs 5 lakh would impact the tax impact on a common man by quite a bit.
Tax Practitioners (AIFTP) president Narayan Jain stated that the exemption limit should be increased to Rs 5 lakh.
Boosting economic activity
Concurs secretary Income Tax Bar Association, Calcutta, Himadrai Mulhopadhyay. “Raising the exemption limit will surely help raise the income tax base. But to my mind the government would settle for a raise of Rs 1 lakh at the most,” he said.
“It goes without saying that raising the basic exemption limit alone will put a lot of extra cash into the pocket of the common man. It can easily flow into the markets raising consumption and boosting economic activity,” said Mukhopadhyay an income tax practitioner for about 3 decades.
Jain mentioned another recommendation their body made to the finance minister. It concerns simplification of the income tax structure to ease compliance.
“Income between Rs 5 lakh to Rs 10 lakh be taxed at 10 per cent, between Rs 10 lakh to Rs 20 lakh at 20 per cent, and income above Rs 20 lakh at 25 per cent,” Jain wrote in the memorandum AIFTP sent to Finance Minister Nirmala Sitharaman.
Plea to remove education cess
Jain also advocated that the education surcharge and cess be removed. The education cess was introduced in FY2005 as a surcharge to fund educational activities.
Jain’s logic: there is no clarification on how the cess is being used.
Any cess, by definition, is temporary.
“The cess should indeed be removed. But you know a sort of inertia grips any admiistration when a cess is continuing,” said Mukhopadhyay.
While the clamour has been growing for income tax revision, the government has been steadfastly ignoring them for the past few years. But with a rise in the number of ITRs being filed over the past few years and a buoyancy in direct tax revenue, will the finance minister favourably consider some of the demands?
That’s the question on everyone’s lips right now.
Budget tax 2024 expectations: The common man has been eagerly waiting for income tax reductions for the past few years. Will the finance minister gratify them this time? Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
