Budget 2024 Expectations Income Tax: Budget 2024, which will be presented as an interim budget in February 2024, is being eagerly awaited by salaried individuals, especially regarding possible changes in tax exemptions. Among the key demands, streamlining income tax rules and reducing complexities, especially in the new tax regime, is a continued plea.
Many expect the exemption limit under the new tax regime to increase from the current Rs. 7 lakh to Rs. 7.5 lakh or Rs. 8 lakhs. This will make taxable income to that extent tax-free for individuals opting for the new regime.
Also read: Budget 2024 expectations: ‘Standard deduction should be one percent of total salary’
Here is a summary of some key expectations and predictions:
reduction in tax burden
Uday Chawla, Managing Partner, Transarch India, said Indian companies are planning significant salary hikes for employees despite the global economic slowdown in 2024. Based on the significant 10% growth seen in 2023, workers’ wages are expected to increase by approximately 9.8%.
However, Chawla said the optimistic outlook for salaried leaders faces a challenge due to high income tax policies in India.
“Personal income taxes, ranging from 5% to 37%, and additional charges contribute to a significant tax burden,” Chawla said.
tax structure reform
Chawla highlighted that in contrast, countries such as Hong Kong (15%), Sri Lanka (18%), and Singapore (22%) have more favorable tax systems, making them attractive to top-tier talent.
“As we now move towards remote work and the globalization of businesses, there is a real danger that senior talent may be attracted to relocate to countries that offer the most efficient tax structures and better work-life quality and balance. Are.”
Chawla said that as India strives to establish itself as a global power, there is a recognized need for policies aimed at reducing the tax burden on salaried employees, especially senior leaders.
“The need of the hour is to carefully craft policies that go beyond mere attraction, emphasizing the importance of nurturing and retaining top-tier talent. This strategic approach stands as an essential element in strengthening the country’s competitive edge on the global stage.
According to ICRA Analytics, in addition to other requirements, the following are urged;
- Increasing minimum pension amount under APY: The government may consider increasing the pension limit for unorganized sector workers under its flagship scheme, Atal Pension Yojana (APY) as the current amount may not attract enough potential subscribers to enrol.
- Tax free status of annual income from NPS: Senior citizens depend heavily on annual income during their retirement years. Keeping in mind the increase in medical expenses and the financial well-being of senior citizens, the government may give tax-free status to the annual income from NPS. Also, there is no possibility of getting much pension on an investment of Rs 50,000 per year and the limit can be increased to Rs. 1 Lac.
- Separate tax deduction for life insurance premium: A separate tax deduction instead of adding life insurance premium under Section 80C will improve the accessibility of insurance products in the country and encourage people to secure their family’s financial future by investing in life insurance. Besides, the government may also reconsider the 18% goods and services tax imposed on health insurance policies.
Readers should note that these are only expectations and predictions based on reports and expert opinions. The actual announcements will be made during the budget presentation on 01 February 2024.
Follow us on Google news ,Twitter , and Join Whatsapp Group of thelocalreport.in
