Budget 2024: A Comprehensive Look at Expectations

Budget 2024: A Comprehensive Look at Expectations

Budget 2024: A Comprehensive Look at Expectations

Budget 2024: As we anticipate the interim budget scheduled for February 1, 2024, titled "Budget 2024," it's crucial to set realistic expectations. Finance Minister Nirmala Sitharaman has hinted at a lack of "spectacular announcements," dampening hopes for significant changes. However, considering the robust economic performance amid inflation, subtle adjustments may be on the horizon, primarily aimed at rectifying existing anomalies and bolstering savings for the common taxpayer.

Anticipated Tax Adjustments

Moderate Tax Rates and Simplified Regime

The current moderate tax rates and the introduction of a simplified tax regime for individuals in the previous budget suggest that drastic changes are unlikely. Nonetheless, stakeholders express concerns about the 25% surcharge for individuals in the highest tax bracket. A potential reduction in this surcharge could be on the cards, aligning with efforts to ease the tax burden on individuals.

Extension of Benefits for New Manufacturing Companies

Continuing the pro-Make in India stance, the government might extend the advantageous 15% tax rate for new manufacturing companies beyond the existing deadline of March 2024.

Revamping Investment Deductions

The government's shift away from investment-linked deductions might see reconsideration, especially with the current Rs 1,50,000 limit deemed low due to rising income levels and inflation. Potential adjustments could involve increasing limits for stock market-linked investments like mutual funds, Unit Linked Insurance Plans (ULIPs), and Exchange-Traded Funds (ETFs). Moreover, there might be a push to enhance deductions for health insurance premiums, crucial in the face of escalating medical costs.

Infrastructure Funding Boost

To support the extensive infrastructure projects in the pipeline, the government may explore expanding avenues for public funding. A possible increase in the limit for investments in NHAI bonds for claiming exemptions from capital gains tax, from the current Rs 50 lakhs to Rs 1 crore, is under consideration.

Addressing Home Loan Challenges

Considering the challenges faced by first-time homeowners, the government might reassess the impact of high home loan interest rates. Addressing this, there could be an adjustment to the Rs 200,000 limit on the deduction of interest paid on loans for self-occupied property.

Rationalizing Investor Taxation

Investors currently contend with securities transaction tax (STT) and a 10% long-term capital gains tax on the sale of listed shares. While public sentiment may call for changes, the government's incentive to tweak these rates in an interim budget remains uncertain.

Conclusion

As the government navigates the delicate balance between economic stability and addressing public concerns, Budget 2024 is poised to reflect a pragmatic approach. The extent of changes in tax laws just before the Parliamentary elections adds an extra layer of anticipation, making it a crucial event for both the government and the common man. Stay tuned for updates and insights as we approach this pivotal financial milestone.