Budget 2024: There will be tax exemption on income up to Rs 20 lakh annually, there is also a possibility of reduction in tax on petrol and diesel.
In anticipation of Budget 2024, India Inc and influential figures such as Sanjeev Puri are rallying for significant changes aimed at easing the financial burdens on the middle class. With proposals ranging from tax exemptions on incomes up to Rs 20 lakh annually to potential reductions in petrol and diesel taxes, the focus is squarely on boosting consumer spending. Additionally, calls to enhance funding for PM Kisan Samman Nidhi underscore efforts to stimulate rural economies. Meanwhile, discussions on restructuring capital gains tax rules reflect broader efforts towards simplification and equity in taxation.
Budget 2024: India Inc has recommended that the government provide tax relief to the middle class. Industry representatives believe that reducing the tax burden on the middle class will leave people with more money to spend, thereby boosting consumption.
Sanjeev Puri believes that the middle class is struggling due to inflation. He suggests that if excise duty on petrol and diesel is reduced along with providing tax relief, it will benefit millions of people.
The government can provide relief to taxpayers in the full budget. India Inc has given some suggestions to the government regarding the budget, including providing tax relief to the middle class. Sanjeev Puri, President of the leading industry chamber CII, believes that people with an annual income of up to Rs 20 lakh should get tax relief. He has also requested the government to reduce excise tax on petrol and diesel. Puri explained his demands in a meeting with Revenue Secretary Sanjay Malhotra.
No tax relief in the interim budget
In the interim budget on February 1 this year, the government did not provide any relief in income tax. Prior to that, Finance Minister Nirmala Sitharaman had indicated that significant measures, such as relief in income tax, could be announced in the full budget to be presented in July.
Middle class needs tax relief
Puri believes that the middle class is struggling due to inflation. He suggests that reducing excise duty on petrol and diesel along with providing tax relief will benefit crores of people. He also demanded an increase in the funds for the PM Kisan Samman Nidhi.
The amount of Kisan Samman Nidhi should be increased
Currently, over 9 crore farmers in the country receive financial assistance of Rs 6000 annually under this scheme. Puri believes that the government should increase this amount to Rs 8000 in the budget. This scheme was implemented in 2019, and since then, the amount has not been increased. More money in the hands of farmers will help boost consumption in rural areas.
30 percent tax on income of Rs 40 lakh
Mukul Bagla, chairman of the Direct Taxes Committee of the leading industry chamber PHDCCI, stated that the middle class is currently taxed at a rate of 30 percent, leaving them with less money to spend and hindering their ability to save. He mentioned that they have suggested to the government to impose the 30 percent tax rate only on individuals with an annual income of more than Rs 40 lakh. Additionally, the industry chamber FICCI has called for the simplification of capital gains tax rules.
Also read:
Focus on salary class in the first budget of Modi 3.0, will the government increase the income tax exemption limit to Rs 5 lakh?
The Government of India is considering increasing the income tax exemption limit to Rs 5 lakh in the upcoming budget, so that the economy can be boosted by putting more money in the hands of the people through the new income tax system.
Need to change capital gains tax rules
Currently, the rules for capital gains tax vary for different assets, including differences in the holding period for tax purposes. FICCI suggests that the government should categorize assets into three groups: equity instruments, debt, and other assets. Subsequently, they propose that the rates for long-term capital gains tax and short-term capital gains tax be determined for each category.
Final summary: There will be tax exemption on income up to Rs 20 lakh annually
India Inc and industry leaders like Sanjeev Puri are advocating for tax relief for the middle class in Budget 2024, emphasizing the need to reduce taxes on income up to Rs 20 lakh annually and on petrol and diesel. Sanjeev Puri also calls for increasing funds for PM Kisan Samman Nidhi to boost rural consumption. Meanwhile, discussions include proposals for a 30% tax on income above Rs 40 lakh and reforms to simplify capital gains tax rules across different asset categories.
FAQs on Budget 2024 and Tax Proposals
1. What are the key tax proposals for Budget 2024?
Budget 2024 proposes tax relief for individuals with annual incomes up to Rs 20 lakh and potential reductions in taxes on petrol and diesel to stimulate consumer spending.
2. Why is there a focus on tax relief for the middle class?
Industry leaders and experts, including Sanjeev Puri, argue that reducing the tax burden on the middle class will leave more disposable income in their hands, boosting consumption and aiding economic recovery.
3. What is PM Kisan Samman Nidhi, and why is its funding being discussed?
PM Kisan Samman Nidhi is a financial assistance scheme for farmers. Discussions include increasing the annual assistance from Rs 6000 to Rs 8000 to enhance rural consumption and support farmers’ livelihoods.
4. What is the proposal regarding a 30% tax on income above Rs 40 lakh?
Industry bodies like PHDCCI suggest imposing a 30% tax rate only on individuals earning more than Rs 40 lakh annually, aiming to balance tax burdens more equitably.
5. Why are reforms to capital gains tax rules being proposed?
Currently, capital gains tax rules vary across different asset categories. FICCI proposes categorizing assets into groups like equity instruments, debt, and others, with tailored tax rates for long-term and short-term gains to simplify and streamline taxation.
6. What role does India Inc play in shaping these proposals?
India Inc, represented by influential industry chambers and leaders, provides recommendations to the government on fiscal policies like tax relief and reforms to spur economic growth and investment.
