[Opinion] Aam Aadmi and Budget 2024
- Blog|News|Income Tax|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 3 July, 2024
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CA Nilpa Gosrani & CA Disha Mehta – [2024] 164 taxmann.com 47 (Article)
As aamaadmi traverses through a series of emotions from an electrifying election followed by oath taking ceremony, to the ongoing T20 World Cup, all eyes are now set on full-fledged Budget 2024.
A slew of tax reforms have been witnessed over the past years, ranging from taxation of long-term capital gains, new tax regime, faceless assessment and appeal schemes, simplification of return filing procedures, special incentives for investors in the IFSC units and GIFT city to introduction of GST laws, in indirect taxation.
While these reforms have contributed positively to the economy, we now look at the additional measures that can be undertaken to address challenges faced by the he Aam Aadmi from an income tax perspective, which can be addressed in the budget.
Increase in basic exemption limit
Considering the soaring food prices vis-a-vis the moderate increase in income and increase in cost of living, it is recommended that the basic exemption limit in the new tax regime be increased and alongside, the rebate of INR 7,00,000 be also enhanced to atleast INR 10,00,000, to make it attractive.
The aam aadmi still opts for the old regime to claim HRA benefit, chapter VIA deductions, which is otherwise not available in the new tax regime. Increase in the basic exemption limit and the rebate would encourage a greater number of taxpayers to opt for the new regime, which will be in line with the intention of Government in promoting the new tax regime.
Treatment of interest on housing loan
Currently, for self-occupied properties, the deduction for interest on housing loan is allowed only up to INR 2 lakhs, which has remained constant for almost a decade.
In consideration of an upward trend in property prices in India, there is a dire need to increase the threshold limit to atleast INR 5 lakhs. This will benefit the middle-class taxpayers.
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