Know the Industry Expectations for Union Budget 2024

With FM Nirmala Sitharaman expected to present the Union Budget 2024, the Industry anticipates some tax reforms even though it is not a full budget.
Union Budget 2024 - industry expectations - finance minister - TAXSCAN

Finance Minister Nirmala Sitharaman is expected to present the interim Union Budget 2024 on February 1, given the imminent Lok Sabha elections.

This interim budget will precede the complete FY25 Budget, which will be presented once the new government is formed. Marking her sixth budget presentation, Sitharaman initially introduced her inaugural full Budget in July 2019.

The last interim budget in 2019 was presented by Piyush Goyal, who temporarily took charge of the Ministry of Finance due to Arun Jaitley’s illness. While Goyal introduced measures like a Rs 6,000 per year cash dole to 12 crore farmers, tax benefits for the middle class, and a full tax rebate for individual taxpayers with an annual income of up to Rs 5 lakh, Sitharaman’s approach for the upcoming vote on account remains focused on essential fiscal responsibilities.

Earlier, Union Finance Minister Nirmala Sitharaman confirmed that her upcoming budget announcement on February 1, 2024, will not feature any groundbreaking measures, as it is intended to serve as a vote on account ahead of the general elections.

Read More: Budget 2024: FM rules out possibility of Spectacular Announcements

Anticipation looms among tax experts, who foresee substantial changes in Budget 2024, with a particular focus on enhancing deductions for medical insurance premiums and streamlining the capital gains tax structure, in spite of the interim nature of the budget.

In the old tax regime, the following expectations are anticipated:

1. An anticipated increase in the deduction limit under Section 80D for medical insurance premiums, potentially elevating it from ₹25,000 to ₹50,000 for individuals.

2. A proposal to raise the deduction limit under Section 80D for medical insurance premiums for senior citizens from ₹50,000 to ₹75,000, reflecting the escalating healthcare expenses.

3. The simplification of the capital gains tax regime, aimed at establishing parity across diverse asset classes.

Under the new income tax regime, expectations for Budget 2024 include:

1. The extension of Section 80D deductions for medical insurance premiums, ensuring uniform access to healthcare-related tax benefits.

2. The potential reintroduction of Section 80CCG, featuring attractive deductions for investments in diversified mutual funds or index funds. This move aims to incentivize retail participation in the stock market and foster long-term wealth creation.

Beyond these expectations, experts advocate for additional measures, such as an increase in the deduction limit for interest repayment on home loans for both residential and commercial properties. This proposal considers current market conditions and aims to promote housing affordability. The necessity of these measures to establish a fairer and more comprehensive system for taxpayers is paramount.

As Budget 2024 unfolds, these proposed changes hold the potential to reshape the fiscal landscape, offering new avenues for tax benefits and encouraging financial inclusivity, while being an important announcement of the Central Government prior to stepping down from power for the elections.

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