Showcasing Tax regimes tweaks in upcoming Budget 2024

The country is going to witness its fifteenth Interim Budget or Vote on Account for the FY24-25, therefore the budget for full financial year will be announced by the next upcoming government after the elections.

Showcasing Tax regimes tweaks in upcoming Budget 2024
Union Finance Minister of India Smt. Nirmala Sitharaman

The Interim Budget will be displayed by the Finance Minister Smt Nirmala Sitharaman on 1st February 2024. The Budget this year will not be for a full-financial year on account of next year's parliamentary elections and thus would be recognized as interim or vote on account.

The country is going to witness its fifteenth Interim Budget or Vote on Account for the FY24-25, therefore the budget for the full financial year will be announced by next upcoming government after elections. As per the code of conduct of the Election Commission of India, the ruling party is not allowed to propose new tax reforms in the Interim Budget as this could adversely affect the fair voting process. 

The anticipations for potential relief in the realm of personal income tax are highly optimistic. The expectations are highly influencing the tertiary sectors regimes, where the extension of the 80D deduction limit for individuals, is highly demanding.

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As per the financial sources, the annual income of 10 lakh will be expected to have new tax slabs. The current tax structure makes two tax slabs for 10 lakh income, first between 6 to 9 lakh [having 10 per cent tax deduction], and second between 9 to 12 lakh [having 15 percent tax deduction]. The new tax regime could integrate both slabs under one tax deduction structure of only 10 lakh income. This would be expected to have 10 percent tax.

However, certain benefits of standard deduction has been extended to the job pensioners class of group where salaried individuals gets a standard deduction of Rs50,000 and pensioners Rs15,000.

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The current tax regime has been raised to the limit of Rs7 lakh, which means up to Rs 7 lakh there will be no payment of income tax. While certain expected changes can be done under the surcharge rate category, as of now, the highest surcharge rate in personal income tax has been reduced from 37 percent to 25 percent in the new tax regime for income above Rs2 crore.

On the second note, the revenue generation could be possibly expected through disinvestment procedures. The government is likely to keep focus upon the disinvestments of public sector units with sources indicating the proceeds to take over the Rs50,000 crore disinvestment transactions. Untill now, the government has raised Rs10,051.73 crore from pur stake sale receipts and Rs43,843.38 crore from dividends from CPSEs, taking the total receipts from the DIPAM [Department of Investment and Public Asset Management] to Rs53,895.11 crore.

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