Budget 2024 Tax Expectations: Will Modi Govt increase Standard Deduction limit?

New Delhi: With the beginning of the month of July, the countdown to Budget 2024 has also started. Finance Minister Nirmala Sitharaman is expected to present Budget 2024 in the third week of the present month. Being the first budget of Modi 3.O government, there are a lot of things being speculated. The kind of results that came in the elections and the formation of the NDA government, there are speculations that relief on income tax can be given to attract the voters.

According to a CNBC report, the Finance Ministry is considering increasing the limit of standard deduction in the new tax regime. The report says that after negotiations and internal assessments between the Prime Minister’s Office and various government departments, it will be considered as part of Budget 2024 can be included as follows.

Standard Deduction limit to be increased?

According to another report, tax and consultancy firm EY has suggested that the standard deduction limit should be doubled to Rs 1 lakh in the new tax regime. At present, there is a standard deduction of Rs 50 thousand in the new tax regime.

Standard deduction is a fixed amount which is deducted from the taxable income of the taxpayer. This reduces the taxable income and reduces the tax liability on it. To take standard deduction, the taxpayer does not have to provide any kind of proof.  Salaried employees and pensioners are allowed to claim standard deduction.

New tax regime

In Budget 2023-24, Finance Minister Sitharaman made changes to make the new tax regime attractive. Making standard deduction a part of the new tax regime was one of them. Under this, salaried individuals and pensioners get a tax deduction of Rs 50,000. Deduction has been given. Earlier, standard deduction was limited only to the old tax regime.

Standard Deduction limit is not enough

Experts believe that in the current economic conditions, where inflation is high, the standard deduction limit of Rs 50,000 is not enough. That is why there is speculation that the government will increase the limit of Rs 50,000 for standard deduction to keep pace with the current expenses and inflation. Can consider increasing the limit of standard deduction to Rs 1 lakh.

Increase in disposable income

If the NDA government increases the limit of standard deduction in Budget 2024, then the disposable income i.e. disposable income of the salaried person will increase. With increase in income, people’s expenditure will increase due to which consumption will increase ultimately boosting economic activities.

No increase in Standard Deduction

There is no hope of increasing the limit of standard deduction in the old tax regime full of exemptions and deductions. In fact, the government wants more and more people to leave the old tax regime with exemptions and adopt the new tax regime with lower tax rates. For this reason, the government may take some steps in Budget 2024 to make the new tax regime more attractive.

 Budget 2024 Expectations: Standard deduction is a fixed amount which is deducted from the taxable income of the taxpayer. This reduces the taxable income and reduces the tax liability on it.  Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today