Budget 2024: Proposal to double standard deduction in new tax regime, will taxpayers get relief?

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Income tax relief: EY says that to make the new relief tax regime more attractive, it is necessary to increase the standard deduction or increase the tax exemption limit.


New Delhi:

Tax and advisory company EY has demanded the government to increase the tax exemption limit in the upcoming budget 2024. The company says the government has doubled the standard deduction under the new concessional tax system to Rs. 1 lakh or raise the basic tax exemption limit to Rs. 3.5 lakh should be done. EY says raising the standard deduction or increasing the tax exemption limit is necessary to make the new concessional tax regime more attractive.

The company said that on the personal tax front, the tax regime should continue to provide relief without exemptions/deductions.

Under the current tax system, taxpayers can choose between the old regime and lower rates and the new relief regime. In the old tax system various exemptions and deductions are given, while in the new tax system Rs. A standard deduction of 50,000 is given but no concession is given.

The company also suggested that the government should maintain stability in corporate tax rates, rationalize the TDS provision and improve dispute resolution.

These reforms are needed on the reform on the taxation front

Highlighting the priorities for tax reform in the upcoming budget, EY said the government needs to streamline the tax structure, reform the policy framework to promote economic growth and prioritize an enabling environment for investment and growth.

The situation has improved due to the good steps taken by the government

EY said the government has taken several welcome steps to improve tech and data-driven tax compliance processes. These include pre-filed returns, Annual Information Statement (AIS), ease of tax payment, speedy processing of returns and refunds etc. This has improved the status of voluntary tax compliance.

When will the budget 2024 be presented?

According to reports, Finance Minister Nirmala Sitharaman may present the Union Budget 2024-2025 in the month of July. However, no official announcement has been made regarding this. In the interim budget presented in February this year before the Lok Sabha elections, Nirmala Sitharaman had announced no change in tax rates or slabs. But now it is expected that the next full budget 2024-25 may provide some relief to taxpayers, especially the salaried and middle class.



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