Union Budget 2024: 4 Tax Exemptions can be Announced on February 1

The interim Union budget 2024 will be presented on February 1, and there are only a few days left. It is expected that the government may make changes in four tax regulations.

The Union budget 2024 will be presented by Finance Minister Nirmala Sitharaman on February 1. The Finance Minister has clarified that there won’t be any major announcements in this budget. However, there is hope among people for tax exemptions, which may be announced in the upcoming budget.

People are hopeful that the Finance Minister may increase the deduction limit under Section 80C for the amount deposited in the National Pension Scheme (NPS) at the time of withdrawal. Additionally, there is anticipation for increased deductions in Section 80C and 80D for home loan repayments by salaried employees. Let’s explore the expected changes in four tax regulations.

Union Budget 2024
Union Budget 2024

1. Changes in Section 80C Deduction Limit

There can be Changes in Section 80C Deduction Limit: Currently, deductions available under Sections 80C, 80CCC, and 80 CCD(1) together have a maximum annual limit of up to ₹1.50 lakh. This limit was increased from ₹1 lakh to ₹1.50 lakh in 2014. It is hoped that this limit could be further increased to ₹2.50 lakh.

2. Changes in Tax Slabs

Under the old tax regime since 2014, there have been no changes in tax slabs, resulting in an increased tax burden on individuals. There is hope for revisions in the tax slabs under the old tax system.

Current tax Slabs under the old tax system:

  • No tax on income up to ₹3 lakh
  • 5% tax on income between ₹3-6 lakh
  • 10% tax on income between ₹6-9 lakh
  • 15% tax on income between ₹9-12 lakh
  • 20% tax on income between ₹12-15 lakh
  • 30% tax on income above ₹15 lakh

3. Demand for Tax Exemption on NPS Withdrawals

Currently, there is no tax on withdrawals up to 60% from the National Pension Scheme (NPS). The majority of the amount is taxed when fully withdrawn. There is a demand for a tax exemption on the entire NPS withdrawal amount.

4. Exemption on Home Loan Repayments

Expectation for Separate Tax Exemption on Home Loan Repayments: Under Section 80C of the Income Tax Act, individuals can claim a deduction of up to ₹1.5 lakh on the repayment of the principal amount of a home loan. This deduction can also be claimed under other schemes, including life insurance plans and government schemes. There is hope that a separate tax exemption may be introduced for home loan repayments to provide relief to individuals.

Every Indian Taxpayers are expecting to hear some good news this year on Feb 1 on above 4  tax regulations, As election are ahead we may hear some good news from current Government.

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