Finance Minister Nirmala Sitharaman presents the Union Budget 2023-24 in the Lok Sabha, in New Delhi. FILE/PTI
Finance Minister Nirmala Sitharaman will table an interim Union Budget 2024 on Thursday, 1 February in Parliament. It will be the last major economic document before the Lok Sabha elections 2024. Like every year, expectations from Budget 2024 are high this time too in terms of providing relief to the common man, the middle class, farmers, women and the industry.
Sitharaman has already presented five annual budget. The Budget 2024 will be presented around 11:00 am on Thursday.
Who wants what from Budget 2024?
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One of the primary expectations of the common man from interim Budget 2024 is a possible reduction in taxes.
With the burden of inflation and prices rise continuing to impact households, people are hopeful that the government will consider measures to alleviate their financial stress.
The income tax slab is also an area of keen interest for the common man as many are hopeful for a revision that could lead to reduced tax liabilities or an expansion of income brackets.
Several people have said they want education and health to be made affordable as they are still not in reach for many.
Income Tax Relief
A number of people in India have called for reductions in personal income taxes, increases in tax rebates, and the inclusion of additional benefits for taxpayers, including education and travel concessions.
“I am a salaried employee and a tax-paying one. Currently, I am enrolled on the old tax regime as it is more attractive for me in terms of tax savings. I want to move towards the new tax regime but will need lower tax rates per slab. Please ensure more and more people pay tax and salaried employees are not burdened,” wished a resident of Bengaluru from the coming budget, CNBC TV18 said.
As per a number of tax payers, the government should look to raise the standard deduction from the current Rs 50,000 to Rs 1 lakh in both the old and the new income tax regime.
“This is in line with inflation and will give more disposable income in the hands of people,” they asserted.
For the unversed, standard deduction was reintroduced in 2018 at Rs 40,000 and hiked to Rs 50,000 in the 2019 Budget.
In the last year’s Budget, the Finance Minister had made extensive changes to the new personal income tax regime. The new income tax regime has also been made the default income tax regime for salaried taxpayers.
Tax experts feel that since standard deduction was introduced in the new income tax regime last year, there is a possibility that the government may either increase the standard deduction limit in the new tax regime or add more exemptions and deductions such as those for Section 80C, 80D and housing loan interest.
More Tax Relief for Salaried
CNBC TV18 has placed budget ballot boxes at various locations across key cities, asking citizens to make known their wishes to the Finance Minister ahead of the interim Budget.
Making their wishes, some people have asked for exemptions for banking and stock market losses, with a plea to treat business and personal losses similarly.
Some citizens are also hoping from the government to increase standard deductions and medical premiums under Section 80D, citing the rise in the cost of living and inflation.
“With high inflation, the cost of many regular items has increased manifold. I request the government to raise the standard deduction limit to Rs 1 lakh. Medical 80D premium should also be increased as a lot of emphasis is given on health these days,” a resident from Mumbai said.
The standard deduction is a flat deduction from the income that is taxable under the head ‘salaries’ and it is currently set at Rs 50,000.
Some citizens also highlighted that interest rates of the Public Provident Fund (PPF) currently at historical lows. There are suggestions for potential adjustments in the tax treatment of PPF contributions to provide further relief to the salaried class.
Higher Exemption Limits & Tax Slab Restructuring
There have been widespread appeals to raise the tax deducted at source (TDS) limit on fixed deposit (FD) interest.
Currently, the exemption limit for TDS deduction on FDs is Rs 40,000, which means that if the total interest earned for a financial year on FDs held with one branch of a bank exceeds Rs 40,000, TDS will be deducted at a rate of 10 per cent.
Big Schemes Unlikely
Meanwhile, economists believe the government is unlikely to announce big bang populist schemes in the coming Budget 2024.
Historical trends suggest that interim budgets or vote on account usually refrain from introducing entirely new schemes, except for instances such as the PM Kisan scheme in 2019, Samiran Chakraborty, Chief India Economist at Citi, was quoted as saying by CNBC TV18.
“…some small tweaks can always be done, like we have estimated that if the PM Kisan scheme, amount is increased from Rs 6,000 to Rs 9,000 the additional burden on the exchequer is only about 0.1 per cent of GDP. So those kinds of small changes can happen but don’t expect a big bang, populist scheme,” Chakraborty said.
Why interim budget this year?
The Budget 2024 will be an Interim Budget because Lok Sabha polls 2024 are scheduled to be held in the coming months and the full year Union Budget 2024 will be presented after the new government is elected.
With inputs from CNBC TV18