Budget 2024 / Standard deduction should be doubled, who suggested this?

Budget 2024: Even though the date of presenting Budget 2024 is not clear, the government has started receiving suggestions from different sectors. This time the suggestion has come from tax and advisory company EY. If the government accepts this advice, then taxpayers can save a lot of tax. EY has also suggested the government to double the standard deduction and increase the tax exemption limit. Let us also tell you what EY has advised before the budget?

What did EY advise?

Tax and advisory company EY has advised the government to double the standard deduction to Rs 1 lakh or increase the basic tax exemption limit to Rs 3.5 lakh under the new concessional tax system in the upcoming budget. Outlining the priorities for taxation reforms in the upcoming budget, EY said the government should prioritise streamlining the tax structure, improving the policy framework to boost economic growth, and promoting a conducive environment for investment and growth.

Suggestions on corporate tax

EY suggested that corporate tax rates be kept stable, TDS provisions be rationalised, and dispute resolution be streamlined. The company said that the concessional tax regime should continue without exemptions/deductions on the personal tax front. Listing the policy priorities before the new government, EY said that to make it more attractive, the standard deduction under the concessional tax regime can be increased from the current Rs 50,000 to Rs 1 lakh or the tax exemption limit can be increased from Rs 3 lakh to Rs 3.5 lakh.

How much is the current standard deduction?

Under the current tax system, taxpayers can choose between the old system and lower rates and the new concessional system. While the old system provided various exemptions and deductions, the new tax system provides a standard deduction of Rs 50,000 but no exemptions. EY said that the government has taken several welcome steps to improve technology and data-driven tax compliance processes. These include pre-filled returns, annual information statements, ease of tax payment, faster processing of returns and refunds, etc. This has improved the situation of voluntary tax compliance.