Union Budget 2024-25 Expectations: Here Are 4 Income Tax Benefits Expected From FM Sitharaman

The Interim Budget 2024-25 is set to be presented by Finance Minister Nirmala Sitharaman on February 1, 2024. While major announcements might be postponed until after the 2024 Lok Sabha Elections, there is an expectation of addressing lingering concerns and laying the groundwork for future economic growth, according to Mint reports.

Archit Gupta, Founder, and CEO of ClearTax, mentioned that the upcoming Union Budget is likely to prioritize fiscal discipline and avoid populist measures. However, there is optimism for potential relief in the realm of personal income tax, particularly in the New Tax Regime.

Here are income tax benefit expectations from Budget 2024

80D Deduction Limit:

• The deduction limit for medical insurance premiums under Section 80D is suggested to be increased from ₹25,000 to ₹50,000 for individuals and from ₹50,000 to ₹75,000 for senior citizens. This adjustment aims to reflect the rising healthcare costs, promoting equitable access to healthcare in the new tax regime.

TDS Compliance for Home Buyers:

• The current deduction of 1% TDS on property purchases exceeding ₹50 lakh, which is straightforward for resident sellers using Form 26QB, poses complexity for Non-Resident Indian (NRI) sellers. There is a call for easing TDS compliance for home buyers, especially NRIs, to streamline the process.

Simplification of Capital Gains Taxation:

• The current complexity in the capital gains tax regime, involving various factors such as asset classes, holding periods, tax rates, and residency status, is considered challenging for investors. The recommendation is to streamline the classification of equity and debt instruments, unify tax treatment for listed and unlisted securities, and simplify indexation provisions.

Consideration of Bengaluru as a Metro City for HRA Exemption:

• Despite being constitutionally recognized as a metro city, Bengaluru is currently classified as a non-metro for income tax purposes. This classification results in limiting HRA deductions to 40% for Bengaluru residents instead of the 50% available in other metro cities. There is a proposal to reconsider Bengaluru's classification for HRA exemption.