Budget 2024 / New tax regime will be more attractive! Modi government can give these concessions in the Union Budget

Budget 2024: Budget preparations are in full swing. The Finance Minister is constantly discussing the budget with industry organizations and experts before bringing the budget. According to sources, one of the many proposals before the Finance Ministry is related to tax relief for salaried taxpayers. Finance Minister Nirmala Sitharaman will present the Union Budget next month, which will be her seventh and the first budget of the Modi 3.0 government. The government is expected to introduce some major tax relief measures for middle class taxpayers in the upcoming budget. These may include the announcement of several concessions to make the new tax regime more attractive.

Standard deduction expected to be increased

The standard deduction is expected to be increased under the new tax regime in Budget 2024. The government may consider increasing the limit of standard deduction under the new tax regime to make it more attractive. Despite the introduction of a standard deduction of Rs 50,000 and higher tax exemptions in Budget 2023, so far the new tax regime has not received the response the government had hoped for.

What is standard deduction?

Standard deduction, which comes under salary, is a flat deduction from the total annual income of an employee. While calculating the tax liability of a salaried employee, a certain amount—which is currently Rs 50,000—is deducted as standard deduction, thereby reducing the taxable amount for that individual.

Tax exemption limit may increase

Various media reports also suggest that the Modi government may increase the basic tax exemption limit from the current Rs 3 lakh to Rs 5 lakh under the new tax regime to boost demand. Experts believe that the government's potential move will put more money in the hands of taxpayers, which they will spend.

What will be the impact?

If Finance Minister Nirmala Sitharaman decides to increase the tax exemption limit from the current Rs 3 lakh to Rs 5 lakh, the tax liability for taxpayers with taxable income of Rs 50 lakh will be reduced by around Rs 10,400 (including 4% health and education cess) from Rs 7.6 lakh.