Under the old tax system, changes can also be made in the tax slabs. Experts say that the government’s focus is to provide tax relief to the middle class and get them to invest as much as possible to boost the country’s GDP growth.
The budget for the new term of the Modi government is expected to be presented on 23 or 24 July 2024. Experts estimate that the government may consider giving relief in tax (Income Tax) while promoting the common people. Along with this, many big announcements can also be made in the budget. According to media reports, the government may increase the tax exemption limit from Rs 3 lakh to Rs 5 lakh under the new tax regime in the upcoming budget.
It is also expected that changes can also be made in the tax slab under the old tax system. Experts say that the focus of the government is to get maximum investment to advance the country’s GDP growth by giving tax relief to the middle class. In such a situation, from changes in the tax slab to the exemption limit can be increased under the new tax system. However,
the government is also considering strengthening the fiscal deficit, so these tax exemptions may be postponed. The government aims to maintain its fiscal deficit target of 5.1% of GDP for the current financial year. Meanwhile, it is expected that the government may increase the limit of tax exemption under Section 80C of the Income Tax Act 1961 during the budget.
No change for 10 years
Under Section 80C, tax exemption of up to Rs 1.5 lakh is given under Public Provident Fund, Insurance and other schemes. However, if the government increases its limit, then this limit can go up to Rs 2 lakh. Especially when it has been 10 years since this change.
What is the estimate of experts?
Mitesh Jain, partner of Economic Laws Practice, said that since the first budget of the BJP government after the elections in 2014, the maximum deduction under Section 80C has been limited to Rs 1.5 lakh. Section 80C is a famous tax saving instrument among taxpayers in the old tax regime. In such a situation, most people are investing to take advantage of it.
Expenditure on means like life insurance premium, tuition fees and home loan repayment has also increased significantly, due to which often individuals get exemption up to the limit of Rs 1.5 lakh. Taxpayers have been expecting an increase in this limit in many budgets for a long time, but it has not happened yet. Now it is hoped that this limit can be increased in this year’s budget.
Experts say that there is a demand to increase the limit of Section 80C to Rs 2-2.5 lakh, so that there can be some relief from rising inflation. Meanwhile, Manmeet Kaur, partner of Karanjawala & Company, said that this limit is likely to be increased from Rs 1.5 lakh to Rs 3 lakh.
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