The salaried class is expecting a lot from the next budget because the interim budget for 2024 did not provide much relief for taxpayers. Significant tax revisions are anticipated in Budget 2024, which should relieve burdens and increase savings for taxpayers—particularly the middle class. Potential adjustments recommended by personal finance experts include lowering the top tax rate under the new tax system, enhancing the standard deduction, and raising the tax rate threshold under the previous tax system. They believe the administration will rectify alleged flaws in the new tax system unveiled in Budget 2023, which failed to draw in the expected number of taxpayers.
Although the new tax regime’s adjustments in Budget 2023 encouraged taxpayers to make the changeover, the change is still not what was anticipated. Under the new tax system, the government is anticipated to think about lowering the highest tax rate from 30% to 25% and raising the basic deduction from the present INR 50,000 barrier.
In addition, as a stopgap measure, the government can consider raising the 80C limit and raising the threshold for the highest tax rate under the previous tax system from INR 10 lakhs to INR 20 lakhs.
The middle class has high expectations for the approaching Budget 2024, especially in light of the enhanced savings possible under the previous tax system. A significant anticipation is the potential increase in the Section 80C deduction ceiling from the existing ₹1.5 lakhs to ₹2.0 lakhs.
It is anticipated that the standard deduction, which was most recently raised to ₹50,000, will rise. This would reduce taxable income, which would be very helpful in light of the rising cost of living and inflation.
With the increasing interest in trading, many hope that the ₹1 lakh Long-Term Capital Gains (LTCG) exclusion maximum will be lifted to ₹1.5 or 2 lakhs.
Higher House Rent Allowance (HRA) exemptions are one of the main expectations, as they help counteract rising rental expenses, especially in urban areas. Renters would find it more affordable as a result of the decrease in taxable income.
