The anticipation is building as the Indian government prepares to announce the budget for the year 2024. With each passing year, the budget holds the potential to introduce significant changes that impact the lives of taxpayers across the country. In this article, we will explore the expectations surrounding Budget 2024 and analyze the potential implications for individuals and businesses in India.
The Interim Budget 2019 and its Impact
In the Interim Budget 2019, Piyush Goyal, the former Finance Minister, made a significant announcement that brought relief to many individual taxpayers. He declared that individuals with a taxable annual income of up to Rs 5 lakhs would no longer be required to pay any income tax. Additionally, those with a gross income of up to Rs 6.50 lakhs could avail of tax exemptions by investing in provident funds, specified savings, insurance, and other instruments. The Interim Budget also introduced additional deductions for expenses such as home loan interest, education loans, National Pension Scheme contributions, and medical insurance.
This move was aimed at providing tax benefits to the middle class, with an estimated 3 crore individuals benefiting from tax savings amounting to Rs 18,500 crore. These changes were welcomed by taxpayers across the country, as they aimed to reduce the burden on the middle-income group.
Budget 2023: The New Income Tax Regime
In Budget 2023, the government introduced the new income tax regime, which made significant alterations to the income tax slabs. Under this new regime, taxpayers had the option to choose between the old and the new tax structures. The basic exemption limit was raised to Rs 3 lakh from Rs 2.5 lakh, providing relief to many. The new tax slabs were also restructured, with no tax being applicable for income up to Rs 3 lakh. Income between Rs 3 lakh and Rs 5 lakh was taxed at a 5% rate, while income between Rs 6 lakh and Rs 9 lakh was taxed at a 10% rate. For income between Rs 12 lakh and Rs 15 lakh, a 20% tax rate was applicable, and for income above Rs 15 lakh, the tax rate stood at 30%.
Also Read Union Budget 2023 Highlights
One of the significant changes introduced in Budget 2023 was the increase in the rebate under section 87A. This rebate, previously applicable for individuals with income up to Rs 5 lakh, was extended to those with income up to Rs 7 lakh. As a result, individuals opting for the new income tax regime and falling within this income bracket were exempt from paying any taxes.
Expectations for Budget 2024
As Indians eagerly await the announcement of Budget 2024, several expectations have emerged regarding potential changes that could impact taxpayers in the country. Let's explore some of these expectations in detail:
1. Income Tax Exemption Limit
One of the key expectations is an increase in the income tax exemption limit. Taxpayers hope that the government will raise the limit to provide relief from the rising cost of living and inflation. Many individuals argue that the current exemption limit of Rs 5 lakh is insufficient and that a higher limit, such as Rs 10 lakh, would be more appropriate.
2. Inclusion of Petrol, Diesel, and Electricity under GST
Another expectation is the inclusion of petrol, diesel, and electricity under the Goods and Services Tax (GST) regime. This move would help standardize the taxation system and potentially reduce the prices of these essential commodities.
3. Tax Incentives for Infrastructure Projects
The infrastructure sector is crucial for the country's development, and taxpayers expect the government to provide more tax incentives for infrastructure projects. This could encourage investment in the sector and boost economic growth.
4. Financial Support for the EV Industry
Given the increasing focus on environmental sustainability, taxpayers anticipate financial support for the electric vehicle (EV) industry. This could include tax incentives, charging infrastructure subsidies, and financial backing for research and development in the EV sector.
5. Access to Financing for Green Energy Initiatives
Renewable and new energy sectors hope for easier access to financing for green energy initiatives. With India's aim to achieve 50% cumulative installed power generation capacity from non-fossil fuel sources by 2030, it is crucial to provide the necessary financial support to achieve this goal.
6. Boost for Rural Development
Rural-themed stocks are expected to receive attention in Budget 2024. Companies such as Maruti Suzuki, Hero MotoCorp, and Hindustan Unilever, among others, are expected to benefit from potential measures aimed at boosting rural development and increasing rural income.
7. Capital Expenditure in Infrastructure Projects
Economists and industry experts emphasize the need for increased capital expenditure in prominent infrastructure projects. They argue that the government should prioritize spending on infrastructure to bridge the infrastructure gap and stimulate economic growth, especially considering the weakness in private investment.
8. Revisions in Tax Deductions for Home Buyers
Homebuyers have their set of expectations, including an increase in the limit of eligible deduction for interest paid on home loans. They also hope for the removal of the cap on rented property and a simplification of tax deduction at source (TDS) rules for buying house property.
As the Indian government prepares to unveil Budget 2024, taxpayers and businesses are eagerly anticipating the potential changes that may impact them. The expectations surrounding the budget range from increased income tax exemptions to support for infrastructure projects and the EV industry. The government's decisions will undoubtedly shape the economic landscape and have a direct impact on the lives of individuals and businesses across the country. As we await the budget announcement, it is essential to stay informed and prepared for any potential changes that may come our way.