Budget 2024: In the interim budget, employed people will get big exemption in income tax! Learn A to Z from experts
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budget 2024: Finance Minister Nirmala Sitharaman (Nirmala Sitharaman) Will present the general budget in the next few days. In the budget, especially the working people, their eyes are mainly on the announcements and relief on the income tax front. Economists have different opinions on this. Some say that the government can provide relief to income tax payers by increasing the amount of standard deduction in the interim budget to be presented next month before the general elections and give some separate tax exemption for women. However, some also believe that this is an interim budget, so no changes are expected in the income tax matter. Finance Minister Sitharaman will present the interim budget for 2024-25 in the Lok Sabha on February 1. This is his sixth budget.
Government may increase the amount of deduction
Sudipto Mandal, Chairman of the Center for Development Studies, said that in the interim budget, working people and the middle class may get some relief on the income tax front. Some relief is expected to be provided by increasing the amount of standard deduction. But it should also be kept in mind that the poor and lower middle class do not pay income tax. At present there is an exemption of Rs 50,000 under standard deduction. In response to a question related to relief to taxpayers, Pramod Kumar, director of Giri Vikas Adhyayan Sansthan, Lucknow, said that it is difficult to say anything about it. Apart from economic factors, it also depends on many other things. However, given the fact that this is the interim budget being presented before the general elections, some concessions may be made to attract taxpayers’ votes.
Little hope of much change in tax
NR Bhanumurthy, economist and currently Vice Chancellor of Dr. BR Ambedkar School of Economics University, Bengaluru, said that this will be an interim budget. In such a situation, one should not expect much change in the tax system because its purpose is only to get approval on the expenditure budget till the budget of the entire year is presented. I do not expect any changes in the income tax system. Currently, under the old tax system, the tax rate on income up to Rs 2,50,000 is zero. Whereas the tax rate on income between Rs 2,50,001 to Rs 5,00,000 lakh is five percent, the tax rate on income between Rs 5,00,001 lakh to Rs 10 lakh is 20 percent and the tax rate on income of Rs 10,00,001 and above is 30 percent. Is. In the new system, the tax rate on income up to Rs 3 lakh is zero. Five percent on income from Rs 3,00,001 to Rs 6,00,000, 10 percent on income from Rs 6,00,001 to Rs 9,00,000, 15 percent on income from Rs 9,00,001 to Rs 12,00,000, 15 percent on income from Rs 12,00,001 to Rs. The tax rate on income up to Rs 15,00,000 is 20 percent and on income above Rs 15,00,000, the tax rate is 30 percent. Tax relief has been given in both the tax regimes.
A rebate of seven lakhs is available in the new tax policy.
Under the new tax system, people with income up to Rs 7 lakh will be eligible for tax exemption under Section 87A of the Income Tax Act. Whereas for those paying tax under the old system, the exemption limit remains at Rs 5 lakh. Professor Lekha Chakraborty at the National Institute of Public Finance and Policy, an economic research institute, said that in view of the emphasis on women voters, some separate tax exemption can be given to women under Section 88C of the Income Tax Act. He also said that since income tax payers are a small part of the Indian population, announcements related to tax relief for women and men have little impact. When asked about the steps being taken in the budget to simplify the new tax system, Bhanumurthy said that simplification of the tax system is a continuous process. With more data coming in and increasing technology and growing digital economy, there is definitely a need to work on it.
Simple tax process is necessary
Lekha Chakraborty, who also serves as a member of the Governing Board of the Munich-based International Institute of Public Finance (IIPF), said a simple tax system is important for tax efficiency. In the last budget, the government had taken some steps, but they were not very clear and people want clarity. Mandal said that there is no possibility of further simplification of the new tax system in this interim budget. This can happen only in the full budget when the new government comes to power after the general elections.
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