On February 1, 2023, Finance Minister Nirmala Sitharaman will begin delivering the Union Budget 2023-24. Middle-class taxpayers are anticipating for big tax reduction from Finance Minister this time, despite high prices and a global slump.
Some of the requests of Indian income taxpayers include an increase in the basic income tax exemption level, a bigger deduction for house loans and insurance, and simpler capital gain tax regimes. This will be the final full budget before the 2024 Lok Sabha elections.
The deduction limit under section 80C of the Income-tax Act, 1961, should be enhanced from Rs 1.5 lakh to Rs 2.5 lakh in Union Budget 2023-24, according to the Institute of Chartered Accountants of India (ICAI). A raise in the section 80C deduction limit would “offer savings possibilities to the general population.
Union Budget Update 2023-24
- In the new tax system, the rebate has been increased to Rs 7 lakh.
- The new IT system will serve as the default tax regime. The previous regime will still be accessible for tax assessors to pick from.
- Salaried and pensioners – the standard deduction in the new system for taxable income exceeding Rs.15.5 lakhs is Rs.52,500.
- The new regime’s six income bands would be reduced to five: basic exemption up to three lacs, 3-6 lakh 5%, 6-9 lakh 10%, and 9-12 lakh 15%. 12-15 lakhs is 20%, while more over 15 lakhs is 30%.
- Additionally, to improve the IT grievance redressal structure and to raise the presumptive tax restrictions at Sec 44AD – Rs.3 crore and Sec 44ADA – Rs.75 lakhs. Income tax breaks for startups have been extended for another year, till 2024. – Date of Incorporation – From 31.3.2023 to 31.3.2024 – 80IAC. 100 joint commissioners will hear small income tax appeals. Startups can also carry forward their lost benefit from 7 to 10 years.
- 45% of ITRs are completed within 24 hours
- The common ITR form will be available soon
- Existing regulations will be modified to make compliance easier – a single point of contact for SEZ, GSTN, and IFSC registration
- Vivad se Vishwaas, relief for MSMEs – In the event of non-performance, the government would refund 95% of the contract fee to offer relief to them.
- PAN will be used as a unique identification for all digital systems of the specified government institutions.
