In the wake of the upcoming Lok Sabha Elections 2024, the BJP government, under the leadership of Prime Minister Narendra Modi, is gearing up to present its final budget. Finance Minister Nirmala Sitharaman is scheduled to present the Interim Budget 2024 on February 1. It is speculated that as a pre-election gift, the Modi government may increase the income tax exemptions, which could benefit the middle class.
It is speculated that the basic exemption limit for personal income tax could be increased from Rs 2.5 lakh to Rs 3 lakh, which could benefit at least 7 crore taxpayers.
The last time the government changed the personal income tax exemption limit was made in 2014, when the Modi government came into power, raising it from Rs 2 lakh to Rs 2.5 lakh.
While the basic income tax exemption has remained unchanged for a decade, the government had, three years ago, given taxpayers in the salary class with a gift – a standard deduction of Rs 50,000. However, small business taxpayers were left untouched by this benefit, leading to calls for consecutive tax relief.
It is believed that an increase in the income tax exemption limit would not only put more money in the hands of the middle-income group but benefit the economy. This, in turn, is anticipated to have a positive impact on industries and accelerate economic growth.
Currently, taxpayers avail tax relief under Section 80C. Under this, tax exemption is availed through investments in PPF, Sukanya Samriddhi Scheme, and life insurance.
As the government prepares to present the Interim Budget, all eyes are on potential tax reforms that could impact the financial landscape for millions of taxpayers across the country.
