Budget 2024: Taxpayers expectations

 

Budget 2024: Taxpayers expectations

Finance Minister Nirmala Sitharaman will present the Union Budget in the Parliament on February 1, 2024,. It will be an interim budget because this is an election year.

The government is expected by middle-class taxpayers to maintain tax stability and rationalization.

The government's expenses are covered by the interim budget, which is a short-term financial plan, until elections are held and a new government takes office. The whole budget will be presented by the incoming administration following the Lok Sabha elections.

There might be potential changes to the tax regime in order to encourage more taxpayers to choose the new tax system. The government may reduce tax rates and increase the basic threshold for income that is exempt from tax. This would provide relief to middle-class taxpayers.

Many tax deductions and exemptions are not available under the new tax regime. To address this, it proposes increasing the standard deduction limit to account for various expenses incurred by salaried taxpayers. This is seen as a way to ensure that salaried taxpayers are treated similarly to other individuals who can claim deductions for expenses against their income, such as those with income from business or professional activities.

The Interim Budget 2024–2025 is not expected to include any significant changes to income taxes, although taxpayers anticipate certain positive moves that would streamline the ITR filing procedure.

Experts suggest that significant tax changes are unlikely when Finance Minister Nirmala Sitharaman presents the Interim Budget 2024–25 on February 1.

Nonetheless, a few minor adjustments to the budget are anticipated, which will facilitate the filing of income tax returns (ITRs).

An anticipated modification is broadening the purview of the Annual Information Statement, or AIS, which was first presented in Budget 2021. It should be mentioned that the government introduced the Annual Information Statement (AIS) to make it easier for individual taxpayers to review their financial information in one location.

The main goal of the AIS is to make it simple for taxpayers to cross-verify the financial information they supplied on their income tax filings.

Accurate valuation of rental income and interest on income tax refunds, might be added to the AIS.

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