Budget 2024 Expectations: Anticipated Income Tax Reforms
The union budget for 2024, anticipated to be revealed in February 2024, will serve as an interim budget ahead of the impending general elections later in the year. Despite expectations of minimal alterations, taxpayers hold specific hopes and anticipations regarding income tax policies.
Analysis of Interim Budgets
Historically, interim budgets maintain continuity with existing policies, avoiding significant shifts or new initiatives. The Finance Minister’s statement reinforces this notion, indicating no substantial alterations to expect in the 2024 interim budget.
According to Suresh Surana, founder of RSM India, any changes are likely to be minimal or aimed at wide applicability.
Expected Changes in Income Tax Policy
| Expectation | Description |
|---|---|
| Increase of basic exemption limit | The current limit of Rs. 2,50,000 is anticipated to rise to Rs. 3,50,000, providing relief to around 7 crore taxpayers against inflation. |
| Enhancement of 80C threshold limit | Raising the limit from Rs. 150,000 to Rs. 200,000 to accommodate inflation and economic uncertainty, benefiting taxpayers availing investment-linked deductions. |
| Expansion of Section 80D threshold | Increasing the threshold for medical premium deductions under Section 80D from Rs. 25,000 to Rs. 50,000 for non-senior citizens and from Rs. 50,000 to Rs. 75,000 for senior citizens, considering rising health insurance costs. |
| Limiting tax on dividends | Proposing to cap tax on dividends distributed by domestic companies to resident shareholders at 20% (plus surcharge and cess) to mitigate double taxation. |
Budget Focus and Speculations
The budget’s primary focus is expected to center around fiscal prudence and stability, with limited room for major tax reforms. However, targeted adjustments to address inflation and stimulate investment may be announced.
It’s essential to note that these expectations are speculative, and the final budget proposals may deviate.
Budget 2024 Date
The interim budget for 2024 in India is scheduled to be presented on February 1st, 2024.