Nirmala Sitharaman will present her sixth Union Budget on February 1, 2024. Individual taxpayers are expecting important changes in taxation rules when the Finance Minister announces it. As this is an election year, many experts are optimistic about the government opting for popular measures to increase exemptions and impress the country’s taxpayers.
To know more about what’s in store for individual taxpayers in the Union Budget 2024, read on.
Revision of Tax Slabs and Rates
The Finance Minister may provide the following relaxations in tax liabilities in the Union Budget 2024:
Change in the Structure of Tax Exemptions
The upcoming may include the following changes in the structure:
Rise in Standard Deductions
To restore the Old Pension Scheme (OPS), the Budget for the salaried class can include many attractive announcements, as mentioned below:
Easier Late Tax Filing for Taxpayers
Here are some of the current rules relating to late filing of ITR:
However, the tax authorities can issue you notices for the previous 10 fiscal years if an income wasn’t assessed. Many experts are of the opinion that taxpayers must get an equal opportunity to file taxes for the last 10 fiscal years.
Against this backdrop, the Union Budget 2024 may provide taxpayers with an opportunity to file ITR for previous years with penalties. This will even encourage voluntary tax compliance.
Simplification of Capital Gains Tax
The current taxation structure is quite complex, which makes it challenging for investors to understand. They have to consider various factors, such as:
In the new Union Budget, the Finance Minister can simplify this taxation regime by taking the following measures:
Easing TDS Compliance for NRI Home Sellers
Currently, home buyers need to comply with the rule of deduction of 1% tax deducted at source for property purchases of over ₹50 lakhs. The government may make the following changes:
Providing Tax-free Status to Annuity Income from NPS
The Union Government made an income of over ₹7.5 lakhs from the National Pension Scheme taxable since the FY 2021-22. However, to promote social welfare and financial security, the government can also consider providing a tax-free status to annuity income from the NPS.
This is because senior citizens rely on annuity income as their primary source of income. As subscribers already have to purchase annuities from NPS, it makes little sense to put an additional burden of taxation on retired personnel.
Some of these expectations may see the light of the day in the new Union Budget. The government may also introduce some of these measures in the Budget presented post-elections. Many experts are optimistic about changes relating to tax exemptions and deductions, which could have huge implications for the fiscal deficit.