As India approaches the presentation of its interim budget by Finance Minister Nirmala Sitharaman on February 1, 2024, taxpayers across the country have set their expectations. Given that it’s an election year, a full budget is not anticipated; instead, the incoming government will have the responsibility to present a complete budget. Let’s delve into what taxpayers are expecting from this interim budget.

Retaining the Old Tax Regime

Many taxpayers are hoping that the Finance Minister will not phase out the old tax regime. There is a concern among taxpayers that the government might discontinue the old tax regime following the introduction of the new tax regime. The demand is to keep the old tax regime in place.

Increasing the 80D Deduction Limit

Taxpayers are requesting an increase in the deduction limit under Section 80D for individual medical insurance premiums. Currently, the limit is ₹25,000, and there’s a demand to increase it to ₹50,000. For senior citizens, the proposal is to raise this limit from ₹50,000 to ₹75,000.

Expansion of the Tax-Free Slab

Many salaried employees are hoping for an expansion in the tax-free slab. They wish for the government to make annual salaries up to ₹8 lakh tax-free. Currently, under the new tax regime, taxpayers are exempted from tax liability up to an annual salary of ₹7 lakh.

Simplification of Capital Gain Tax

There is a widespread demand for the simplification of capital gain tax. The complexity of the current capital gains taxation regime, considering asset class, holding period, tax rates, and residency status, often confuses investors. Experts suggest that the government should streamline the classification of equity and debt instruments and unify the tax treatment for listed and unlisted securities. Additionally, the provisions for indexation should also be simplified.

Final Thoughts,

The interim budget of 2024 is critical, especially in an election year. Taxpayers are eagerly waiting for relief and simplification in various tax regimes. The government’s approach to these expectations can significantly influence the financial planning and investments of individuals and businesses across the country.

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