Interim Budget 2024: Taxpayers Anticipate Pleasant Surprises With Possible Tax Hike, Says Report

In the interim budget, slated to be tabled in Lok Sabha on February 1, the tax rebate under the current income tax slab may be increased to Rs 7.5 lakh from the existing Rs 7 lakh, according to Indiatv News. If implemented, individuals with an annual income of Rs 7.5 lakh, after a standard deduction of Rs 50,000, will be exempted from paying income tax starting from 2024-25. The changes are expected to be enforced through a Finance Bill, which Finance Minister Nirmala Sitharaman may introduce, as per the reports.

In the Union Budget 2023, the rebate under the new income tax regime was raised from Rs 5 lakh to Rs 7 lakh by the Narendra Modi government, while the basic exemption limit saw an increase from Rs 2.5 lakh to Rs 3 lakh. Additionally, a deduction of Rs 15,000 for family pension was introduced."

Tax evolution in previous years

• In previous years, the income tax slabs underwent a reduction from seven to six, aiming to simplify the personal income tax rules, as reported by Business Standards.
• As per an earlier media report, a record number of 81.8 million income tax returns (ITRs) were filed for the assessment year 2023-24 until December 31, marking a 9 per cent increase compared to the 75.1 million ITRs filed in the same period in 2022-23.
• The focus on boosting tax receipts while simultaneously alleviating the tax burden on individuals has been a central objective for the Centre. According to the media report, during the April-November period in 2023, the tax revenue saw a 14.7 per cent increase, surpassing the budget estimate of 10.5 per cent for direct taxes and 10.45 per cent for indirect taxes.
• A recommendation by the Pension Fund Regulatory and Development Authority, as reported by the news agency PTI, stated that contributions by employers to the National Pension Scheme up to 12 per cent are recommended to be exempted from income tax.
• Deepak Mohanty, chairperson of the Pension Fund Regulatory and Development Authority, said that the body has recommended employer contributions to the National Pension Scheme up to 12 per cent to be exempted from the income tax, reported PTI.