Budget 2024: As the nation awaits the interim budget set for February 1, reports suggest a possible increase in the tax rebate under the new income tax regime to Rs 7.5 lakh from the current Rs 7 lakh.
Anticipated Changes in Tax Regime
If implemented, individuals with an income of Rs 7.5 lakh, after a standard deduction of Rs 50,000, would be exempt from paying income tax starting from the fiscal year 2024-25. Finance Minister Nirmala Sitharaman may introduce a Finance Bill to enact these modifications.
Previous Amendments in Budget 2023
In Budget 2023, the rebate under the new income tax regime was raised to Rs 7 lakh from Rs 5 lakh. Additionally, the basic exemption limit saw an increase to Rs 3 lakh from Rs 2.5 lakh, and a deduction of Rs 15,000 for family pension was introduced. The restructuring reduced the income tax slabs to six from seven, aiming to simplify personal income tax regulations.
Tax Filing Trends and Government Focus
Notably, a record 81.8 million income tax returns (ITRs) were filed for the assessment year 2023-24 by December 31, marking a 9% increase from the previous year. The government has been emphasizing increased tax receipts while alleviating the tax burden. In the April-November period of the previous year, tax revenue surged 14.7%, surpassing budget estimates for both direct and indirect taxes.
Potential Exemptions in National Pension Scheme
In a recent development, the Pension Fund Regulatory and Development Authority has recommended that employer contributions to the National Pension Scheme up to 12% be exempt from income tax, aiming to encourage participation in pension schemes.
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