Budget 2024: Four anticipated Income Tax benefits in Nirmala Sitharaman’s interim budget
The Union Interim Budget on February 1 is eagerly awaited by taxpayers, who hope for some positive changes. Experts suggest potential adjustments, including an increase in the Section 80D deduction limit for medical insurance premiums, HRA exemption changes for Bengaluru, simplification of capital gains tax rules, and clarification on TDS deduction limits for home buyers.
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FollowThe anticipation builds for Finance Minister Nirmala Sitharaman's presentation of the Union Interim Budget on February 1, taxpayers across the country are eager to learn if they will be receiving any income tax benefits this time around. While the budget is not expected to be comprehensive, there are hopes for some positive changes, especially among the taxpayers.
Tax experts suggest that major tax benefits might only be on the horizon after the 2024 Lok Sabha elections and the formation of a new government. However, some minor adjustments are anticipated in this interim budget, offering a glimpse of potential relief for taxpayers.
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1. Section 80D deduction limit:
With rising medical costs, there is an expectation for an increase in the deduction limit under Section 80D for medical insurance premiums. Tax experts anticipate a raise from Rs 25,000 to Rs 50,000 for the general public and from Rs 50,000 to Rs 75,000 for senior citizens. Additionally, there is speculation about bringing Section 80D benefits under the new tax system to facilitate tax reductions for healthcare services.
2. HRA exemption for Bengaluru as a metro city:
Despite being designated as a metropolis under the Indian Constitution, Bengaluru is still considered a non-metro for income tax purposes. Experts propose that in this budget, the city might be reclassified as a metro city, aligning it with other major cities and increasing the HRA exemption limit from 40% to 50%.
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3. Tax simplification on capital gains:
Tax experts highlight the complexity of the current tax system concerning investment income. Suggestions include simplifying rules related to indexation and ensuring equality in the taxation of listed and unlisted securities. This move is aimed at streamlining the tax process for investors and minimizing confusion.
4. TDS deduction limit for home buyers:
Currently, there is a Rs 50 lakh limit for TDS reduction on property purchases, with a 1% TDS deduction on amounts exceeding this limit. The interim budget is expected to bring clarity to rules related to NRI sellers, offering more transparency and understanding regarding TDS reductions for property purchases.
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