Budget 2024: FM Nirmala Sitharaman Five Modifications in Income Tax Regulations Desired by the Middle Class

Revision of Income Tax Bracket Anticipating a revision in the income tax exemption limit, the middle class hopes for an increase from ₹2.5 lakh to ₹5 lakh. In the Budget presentation on February 1, 2023, Finance Minister Nirmala Sitharaman adjusted the slab rates for individuals opting for the new income tax regime.

Elevation of Section 80C Threshold The existing cap of ₹1.5 lakh for investment deductions under Section 80C, stagnant for over a decade, should be augmented to facilitate greater tax savings and encourage higher investments. Mumbai-based tax and investment expert Balwant Jain suggests, “The earlier limit of ₹1 lakh was set in 2003, almost 18 years ago.

Elevation of Standard Deduction Initially set at ₹40,000 by the Finance Act 2018, the Standard Deduction from salary was later raised to ₹50,000 in 2019. Given the escalating expenses associated with medical and fuel costs, there is a compelling argument for further elevating the standard deduction limit from ₹50,000 to ₹1 lakh.

Assistance for Homebuyer Under the existing provisions of Section 80C of the Income Tax Act, individuals can claim a deduction of up to ₹1.5 lakh from their taxable income for the repayment of the principal amount of a housing loan taken for a residential house.

Enhancement of 80D Deduction Cap Archit Gupta, the Founder, and CEO of ClearTax suggests elevating the deduction limit under Section 80D for medical insurance premiums. He proposes an increase from ₹25,000 to ₹50,000 for individuals and from ₹50,000 to ₹75,000 for senior citizens, aligning with the escalating healthcare expenses.