Budget 2024: Will Finance Minister Nirmala Sitharaman increase income tax exemption limit?
Reuters reported that the upcoming first full-fledged Budget 2024 of Modi 3.0 is expected to relieve taxpayers, as the government considers reducing income tax rates for specific groups of individuals. The report also indicates that the government is considering lowering income tax rates for individuals earning annual incomes of ₹10 lakh.Moneycontrol reported, quoting government officials, that the Centre plans to raise the income threshold before any tax is levied from ₹3 lakh to ₹5 lakh in the upcoming budget.
This change will apply only to those filing returns under the new tax regime.“In the past, few tax breaks/ incentives have been extended to individual taxpayers except under the new tax regime. Hence, many believe that this year, the government should at least raise the exemption slab rates for individuals to about ₹5 lakh," said Aarti Raote, Partner, Deloitte India.Several factors, including economic conditions, government priorities, revenue considerations, and political factors, influence changes to income tax exemption limits.Regarding economic conditions, Abhishek Soni, CEO and Co-founder of Tax2win, suggests that if the economy shows signs of recovery or growth, there may be a rationale for increasing the income tax exemption limit.
This adjustment could alleviate the burden on taxpayers and stimulate consumption.Discussing government priorities, Soni notes that the Modi 3.0 administration's decisions, reflected in their policy choices and public statements, will play a crucial role in determining whether they prioritize measures like raising exemption limits.From a revenue perspective, any alteration in tax policy must be considered in light of its impact on government revenue. Soni emphasizes that the
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