Finance Minister Nirmala Sitharaman has begun public consultations on the budget.
The finance ministry plans to raise the standard deduction limit on incomes for taxpayers under the new regime, while leaving the older, exemption-filled regime unchanged, according to the Times of India.
Finance Minister Nirmala Sitharaman has begun public consultations on the budget, although most discussions remain within the finance ministry.
An increased standard deduction would benefit all salaried taxpayers, including higher earners, despite potential revenue losses.
The standard deduction was initially introduced at Rs 40,000 to aid salaried individuals with medical and transport expenses, and was increased to Rs 50,000 in 2019.
Finance Minister Nirmala Sitharaman has begun public consultations on the budget.
The finance ministry plans to raise the standard deduction limit on incomes for taxpayers under the new regime, while leaving the older, exemption-filled regime unchanged, according to the Times of India. This potential adjustment comes as the third NDA government gears up for its first Union Budget.
Finance Minister Nirmala Sitharaman has begun public consultations on the budget, although most discussions remain within the finance ministry. These internal assessments will be reviewed with other government branches and the Prime Minister's Office before final decisions are made.
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In the 2023 Budget, the finance minister introduced a standard deduction of Rs 50,000 for salaried taxpayers and pensioners under the new regime, which became the default unless opted out. Additionally, a rebate under Section 87A was increased for taxable incomes up to Rs 7 lakh, eliminating taxes for these earners. The highest surcharge under the new regime was also removed.
Individuals with taxable incomes over Rs 3 lakh pay 5 percent income tax. Industry leaders have suggested adjusting rates in higher brackets to stimulate consumption. An increased standard deduction would benefit all salaried taxpayers, including higher earners, despite potential revenue losses.
The standard deduction was initially introduced at Rs 40,000 to aid salaried individuals with medical and transport expenses, and was increased to Rs 50,000 in 2019. Given the current cost of living and inflation, this threshold is considered insufficient, leading to expectations that it might be raised to a minimum of Rs 1 lakh.
While major changes to the capital gains mechanism are unlikely, the government plans to align the holding period across asset classes but may decide to maintain status quo for now.
