As the nation eagerly awaits the unveiling of Budget 2024, speculations and expectations are running high, particularly concerning potential alterations to the tax structure that could impact millions of taxpayers. Reflecting on the trajectory of recent budgets, the fiscal decisions of the government have been pivotal in shaping the financial landscape for individuals across the country.
In the Interim Budget of 2019, Finance Minister Piyush Goyal unveiled a significant tax relief measure, exempting individual taxpayers with a taxable annual income of up to Rs 5 lakhs from paying any income tax. Furthermore, individuals with a gross income of up to Rs 6.50 lakhs could enjoy this benefit by making investments in provident funds, specified savings, and insurance, among other avenues. The Interim Budget also introduced additional deductions encompassing interest on home loans, education loans, National Pension Scheme contributions, and medical insurance, providing a comprehensive framework for tax savings.
The fiscal year 2019 witnessed a substantial tax benefit of Rs 18,500 crore earmarked for an estimated 3 crore middle-class taxpayers, underscoring the government’s commitment to easing the financial burden on this demographic.
Fast forward to Budget 2023, and the government aimed to usher in a new income tax regime as the default option. Under this regime, the basic exemption limit was raised to Rs 3 lakh from Rs 2.5 lakh, offering a respite for taxpayers. The income tax slabs in the new regime underwent adjustments, with a notable rebate under section 87A increased from the existing income level of Rs 5 lakh to Rs 7 lakh. This meant that individuals opting for the new income tax regime and earning up to Rs 7 lakh would be exempt from paying any taxes.
The revised tax slabs in the new income tax regime showcased a nuanced approach. No tax would be levied on income up to Rs 3 lakh, with a 5% tax rate applying to income between Rs 3 lakh and Rs 5 lakh. The subsequent tax brackets featured rates of 10%, 20%, and 30% for varying income ranges, providing a more graduated taxation structure.
As the country anticipates Budget 2024, taxpayers are keenly awaiting any potential amendments to the existing tax structure. With economic dynamics evolving and global uncertainties persisting, the government’s fiscal policies are crucial in providing stability and relief to the common man. The hope is that Budget 2024 will continue the trend of taxpayer-friendly measures, fostering financial well-being and economic growth for all.
