Budget 2024: More reasons to opt for new tax regime! Modi govt may offer THESE tax incentives

financialexpress.com:

Union Budget 2024: With just about a month to go before the union budget, the finance ministry has started its routine meetings and consultations with various stakeholders from the industry and social sectors. Among many proposals before the finance ministry, one pertains to tax relief for salaried taxpayers, according to reports.

Finance minister Nirmala Sitharaman will present next month the union budget, her seventh and first of the Modi 3.0 government. It is expected that the government will roll out some big tax relief measures for middle-class taxpayers in the upcoming budget.

According to a report by The Times of India, the government is mulling increasing the standard deduction limit under the new tax regime to make it more attractive. So far, the new tax regime has not received the response the government was expecting despite the introduction of standard deduction of Rs 50,000 in budget 2023 and a high tax rebate.

In the Union Budget 2023, Sitharaman introduced major changes in the new tax regime in the form of standard deduction to encourage taxpayers to switch from the old tax regime. She also offered full tax rebate on incomes up to Rs 7 lakh, increasing tax exemption limit to Rs 3 lakh. The other major announcement in that budget was making the new regime the default option.

Also Read: Budget 2024: Modi govt to raise tax exemption limit to Rs 5 lakh under new tax regime?

The standard deduction, which comes under the head salary, is available as a flat deduction from the total annual compensation of an employee. While calculating tax liability of a salaried employee, a fixed amount – which is currently Rs 50,000 – is deducted as standard deduction, thus lowering the taxable amount for that individual.

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