Key Highlights from Budget 2024
A Look at Budget 2024
As we approach February 1st, 2024, the air in India crackles with anticipation for the Union Budget presentation by Finance Minister Nirmala Sitharaman. This year's budget holds particular significance, serving as an interim bridge before the full budget post-elections in July. Taxpayers across the nation have their eyes glued to the upcoming announcements, harboring hopes for specific changes that could significantly impact their financial well-being.
Here are some of the 6 key expectations that resonate loud and clear:
Reworking the Tax Brackets:
A recurrent wish list item, taxpayers yearn for an upward revision of the basic exemption limit, standard deduction, and higher caps for deductions under sections like 80C and 80D. Some even dream of a brand new 25% tax slab for high-income earners, potentially easing the tax burden.
Bolstering Tax Relief:
Expanding the tax rebate (currently Rs. 5 lakh) to Rs. 7.5 lakh would be a welcome respite for middle-income taxpayers, offering them much-needed breathing room.
Capital Gains Conundrum:
The complexities of capital gains tax are a pressing concern, with calls for a revamp echoing across the nation. Taxpayers hope for reduced rates, extended holding periods for long-term capital gains benefits, or a complete overhaul of the system to bring more clarity and fairness.
New Tax Regime Nuances:
Introduced with much fanfare, the New Tax Regime boasts lower rates but lacks the plethora of deductions available under the old regime. Taxpayers desire a bridge between the two, advocating for the inclusion of deductions like those for contributions to Provident Fund (PF) and National Pension System (NPS) within the New Tax Regime to make it more enticing.
NPS and the New Regime:
Currently, deductions for NPS contributions are locked out of the New Tax Regime, leaving many future-focused individuals disappointed. Including this deduction would incentivize retirement savings and align with the government's long-term vision.
Insurance Affordability Boost:
Removing Goods and Services Tax (GST) from insurance policies is a dream many policyholders harbor. This change would translate to lower premiums, making insurance more accessible to a wider segment of the population and potentially fulfilling the Prime Minister's vision of "insurance for all Indians by 2047."
It's crucial to remember that these are aspirations, and the final pronouncements might paint a different picture. However, they undeniably reflect the collective pulse of Indian taxpayers, their hopes, and their anxieties as they navigate the intricacies of the financial landscape.
Beyond Tax Relief Additional Expectations for Budget 2024:
While tax changes are a major focus, several other areas hold significant expectations for Budget 2024:
Infrastructure and capital expenditure:
- Increased allocation for infrastructure projects: This could include roads, railways, digital infrastructure, and renewable energy to boost economic growth and job creation.
- Emphasis on green infrastructure: Investments in sustainable development projects like electric vehicle charging stations and waste management could be announced.
Social welfare and rural development:
- Expansion of social safety nets: Measures to support vulnerable sections like farmers, senior citizens, and women could be announced.
- Direct cash transfers or schemes: Initiatives like PM Kisan Samman Nidhi (farmer income support scheme) might be extended or enhanced.
- Focus on education and healthcare: Increased allocation for public education and healthcare infrastructure is anticipated.
Boosting specific sectors:
- Incentives for startups and MSMEs: Tax breaks, easier access to credit, and skill development programs are potential areas of focus.
- Support for specific industries: The budget might offer incentives for sectors like tourism, textiles, and manufacturing to encourage growth and job creation.
- Measures to attract foreign investment: Streamlining regulations, tax breaks, and infrastructure improvements could be announced to attract foreign investors.
Fiscal consolidation and sustainability:
- Focus on reducing fiscal deficit: The government is likely to prioritize maintaining a stable fiscal deficit without compromising on growth.
- Measures to increase tax compliance: Initiatives to improve tax collection and reduce tax evasion are expected.
- Responsible borrowing and debt management: The budget might announce plans for responsible borrowing and managing the country's debt burden.
Technology and innovation:
- Investments in digital infrastructure and technologies: This could include initiatives like promoting AI, blockchain, and digital payments.
- Support for research and development: Increased funding for research institutions and startups working on cutting-edge technologies is a possibility.
- Skilling and upskilling programs: The budget might announce initiatives to equip the workforce with skills needed for the digital economy.
These are just some additional expectations for Budget 2024. The specific announcements will depend on the government's priorities and economic considerations. Remember, the upcoming budget is an interim budget, with a full budget expected after the new government is formed in July 2024.
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