What individual taxpayers can expect from Budget 2024
Budget 2023 was the last full-fledged Union Budget of the current government before the 2024 Lok Sabha elections. The Budget presented by the government on 1st February 2024 would be a ‘vote on account’. While no major announcements are expected, individual taxpayers have expectations on the same.
Some key expectations from the Budget 2024 from an individual taxpayer’s perspective are:
Tax slabs and tax rates have remained constant for a long time now. A new simplified tax regime was introduced in the Budget 2020 with lower tax rates if one forgoes certain deductions and exemptions. But there was no change in the regular tax rates for individuals. Last year, some changes were made to the tax slabs and tax rates under the new regime with an intention to popularise the same.
However, with the cost of living going up and loan interest rates rising, a relaxation in the income tax rates for individuals would be a welcome measure for individual taxpayers.
Also Read: Where and how to invest in 2024 to save more tax & accumulate wealth
The highest effective income tax rate in India, including surcharge and cess, stands at 42.744% under the old tax regime and 39% under the new tax regime.
One of the main expectations by the common man is to increase the income threshold for the highest tax rate from Rs 10 lakh to Rs 20 lakh and reduce the rate from 30% to 25%. To make the new tax regime attractive, the income tax rate could be 20% for income between Rs 10 lakh and Rs 20 lakh and 25% for income over Rs 20 lakh.
Standard deduction is a fixed deduction available to salaried individuals without the need for providing evidence of actual expenses incurred. Historically, this deduction was available for many years, but in 2005, this
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