📷 Image Credits: The Times of India
In anticipation of the upcoming Union Budget 2024 in India, stakeholders are eagerly awaiting potential reforms in the income tax regime. The current tax structure features multiple brackets ranging from 5% to 30%, leading to complexity and administrative burdens. Authorities are expected to focus on simplifying the regime by consolidating tax rates into broader categories.
To make the new tax regime more appealing, policymakers may consider re-jigging the tax slab rates to three categories: 10%, 20%, and 30%, eliminating intermediate tax rates and slabs. This move would streamline tax planning and compliance for taxpayers across different income levels, making the new regime more attractive.
In addition, there is a possibility of enhancing the standard deduction from the current Rs 50,000 to Rs 150,000 to provide relief to taxpayers by offsetting everyday expenses against taxable income. Introducing a leave travel allowance under the simplified regime could also make it more attractive and boost domestic travel, thus empowering the common man with increased purchasing power.
For senior citizens facing financial challenges, policymakers may increase the basic exemption limit under the new regime from Rs 300,000 to Rs 700,000 to reduce the tax liability for elderly taxpayers with limited income sources. Moreover, a higher standard deduction of Rs 200,000 for senior citizens could help them offset medical benefits and fixed deposit deductions.
The current capital gains tax framework, perceived as complex, might undergo revisions to create a more uniform and investor-friendly environment. One proposed reform includes a unified tax rate for long-term capital gains across all asset classes, ensuring consistency and predictability for investors. The government may also rationalize holding periods for long-term capital gains and consider allowing the offsetting of losses against gains for greater flexibility.
Amidst these potential changes, the overarching goal is to create a simpler, more equitable, and predictable tax environment that enhances taxpayer compliance and overall financial well-being. As the nation gears up for the Union Budget, stakeholders await the final decisions with hopes of gaining much-needed clarity and relief from the income tax reforms.
Source: News18.com, The Times of India
