Budget 2024: Taxpayers are anxiously anticipating Finance Minister Nirmala Sitharaman’s first budget under Modi ‘3.0’ as Budget 2024 draws closer. A much anticipated modification is the possible raising of the salaried individuals’ current ₹50,000 standard deduction cap. There is anticipation that the Union Budget 2024 will include a moderate modification, raising the cap to ₹60,000–₹1,000,000.
Anticipation for Higher Standard Deduction
Experts in personal finance are optimistic about the possibility of raising the standard deduction caps. The budget for 2018–19 included the introduction of the existing deduction of ₹50,000. According to reports, this sum might be raised to ₹60,000 or perhaps ₹70,000. Salary employees would be in favour of this approach because it would reduce their taxable income.
Benefits for Lower and Middle-Income Taxpayers
There is significant interest in the potential rise of the standard deduction, with expectations suggesting it could increase to ₹75,000 or even ₹1,00,000. This increase would greatly benefit taxpayers in the lower and middle-income brackets by reducing their taxable income and overall tax liability.
Background of the Standard Deduction
Employees can currently claim a standard deduction of up to ₹50,000 in a financial year against any taxable income categorized under “Salaries.” This deduction applies to the salary received, whether in arrears, in advance, or for the current period. The standard deduction was first introduced at ₹40,000 in the 2018 budget and was subsequently raised to ₹50,000 in the 2019 budget. The deduction amount has not changed since then.
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