Income Tax News: The budget’s preparations have begun. And everyone will be watching to see who gets what gift this time from the Finance Minister. However, employed people wait the longest. those who anticipate receiving tax relief. This time around, something comparable is taking place. But this time, the situation is different. Election season is upon us. A provisional budget will be in place.
Finance Minister’s Targeted Approach
The Finance Minister will likewise focus on particular areas solely in such a scenario. Experts predict that this year will likely see something that hasn’t happened in ten years. Since growth is expected, inflation needs to be kept under control. It is necessary to lower interest rates. Taxpayers play a major part in all of this. Taxpayers must be satisfied if consumption is to be encouraged.
Direct Tax Collection Shows Impressive Strength
Direct tax revenue collection for the government has been fairly strong. Profits are rising all the time. The director tax collection increased by 17.01% from December 17, 2023, to the end of the financial year 2023–2024. Additionally, there has been a 20.66% increase in net direct tax collection. Additionally, food inflation is on the rise. For the upcoming months, the Reserve Bank of India has also issued an alert. At the same time, growth is positive, but if it exceeds 8%, taxpayer funds must be increased. These situations collectively suggest that some tax relief is required.
Government Mulls Standard Deduction Cap Increase
If reports are accurate, the government may raise the standard deduction cap while providing relief to taxpayers. Currently, a standard deduction of Rs 50,000 is made. KPMG has insisted on raising it to one lakh rupees. Their allowance ought to be raised in light of the costs associated with travel, printing, stationery, books, staff salaries, vehicle maintenance, and mobile expenses. The 50,000 rupee standard deduction is insufficient to cover all of these costs. In light of rising living standards and inflation, the standard deduction ought to be raised to Rs 1 lakh.
Standard Deduction Falls Short for Many Taxpayers
The deduction of Rs 50,000 is not a significant relief for the salaried class, according to ASSOCHAM. Since not all taxpayers fall into the same salary bracket, many taxpayers find that this relief is insufficient. The standard deduction has also been demanded by the Institute of Chartered Accountants (ICAI) to be based on an inflation-indexed adjustment.
Advocacy for Rs 1 Lakh Standard Deduction
If reports are accurate, the government may raise the standard deduction cap while providing relief to taxpayers. Its current cap is Rs 50,000. It is able to be raised. Experts in personal finance agree that it ought to be raised to Rs 1 lakh. By adding it to the budget wishlist, the government can offer assistance in such a circumstance. According to sources, the standard deduction cap for salaried employees and pensioners may be raised in the budget from the current Rs 50,000 to Rs 75,000.
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