The current tax slab with a basic exemption limit of Rs 2.5 lakh is expected to be increased to Rs 5 lakh under both tax regimes in the upcoming budget. The limit of Rs 2.5 lakh for exemptions has not been changed since 2014-15.
The Modi goverment is all set to present its 9th and final full union budget on 1 February before the general elections in 2024. With rising recession fears, inflationary concerns, unemployment and high-interest rates prevailing in the economy, this year’s budget are likely to have a lot of expectations attached to it.
Moreover, a ray of hope for the middle class has been ignited after Sithraman in an event said she identifies herself as middle class and that she understands the trouble faced by this section. “I belong to the middle class and identify myself as a middle class so I can understand them.”
Let’s have a look at what the Salaried class can expect from budget 2023-24.
1. Hike The Basic Exemption Limit To Rs 5 Lakh
The current tax slab with a basic exemption limit of Rs 2.5 lakh is expected to be increased to Rs 5 lakh under both tax regimes in the upcoming budget. The limit of Rs 2.5 lakh for exemptions has not been changed since 2014-15.
This limit may be revisited considering numerous factors such as an increase in the cost of living, inflation, the number of taxpayers not required to file tax returns, tax revenue foregone by the government, etc. According to a TOI report.
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2. Increase Tax Exemption Limit For Home Buyers
Salaried taxpayers expect that the government should provide additional incentives to increase benefits in the housing sector.
Currently, homebuyers can claim a deduction of up to Rs 2 lakh every year on the interest paid on housing loan EMI u/s 24b. Besides, they can also claim a deduction of up to Rs 1.5 lakh under Section 80C for the principal amount paid on the housing loan. The move will serve as a motivation to potential home buyers.
3. Make Bank FDs Of Upto Rs 5 Lakh Tax-Free
Bank FDs are still a popular and comparatively safer investment option for many Indians. In the upcoming budget, making investments of up to Rs 5 lakh tax-free in budget 2023 can result in small-ticket deposits becoming competitive with small savings plans and insurance products, as per banks, who had even made representations to the finance ministry regarding the same.
4. Reduce Age Limit For Senior Citizens
Section 194P of the IT Act provides for exempting Senior Citizens from filing income tax returns aged 75 years and above subject to certain specified conditions:
- Senior Citizens should be of age 75 years or above
- Senior Citizens should be ‘Resident’ in the previous year
- Senior Citizen has pension income and interest income only & interest income accrued/earned from the same specified bank in which he is receiving his pension
Such benefits may be extended to senior citizens aged 65 years and above in order to avoid such senior citizens facing hardship in filing their returns. With around 10.1% population falling in that bracket, it is likely to woo them ahead of the election season.
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