Union Budget 2024: Focus on Standard Deduction and Income Tax Rates
As Union Finance Minister Nirmala Sitharaman prepares to present her seventh consecutive Union Budget on Tuesday, all eyes are on potential revisions to standard deduction and income tax rates, aimed at providing relief to taxpayers amidst rising inflation.
The standard deduction, currently set at Rs. 50,000, is expected to see an increase, possibly to Rs. 1 lakh or Rs. 75,000, offering salaried employees and pensioners a higher deductible amount from their taxable income without the need for expense proof.
Anticipation also surrounds potential changes in income tax slabs or rates, with expectations for adjustments that could benefit taxpayers and stimulate economic activity.
The budget is poised to prioritize supporting consumption through enhanced allocations for rural economies, tax reforms, infrastructure development, local manufacturing incentives, and initiatives to boost job creation and skills development. A focus on increasing Production-Linked Incentive (PLI) allocations for labor-intensive sectors is also anticipated.
Experts emphasize the need for substantial investments in rural and district-level economies to drive economic growth across traditional and emerging sectors, with a particular focus on sustainability and circular economy principles.
Despite global economic challenges, including inflationary pressures and geopolitical uncertainties, Chief Economic Adviser V. Anantha Nageswaran remains optimistic about India’s economic outlook, projecting a GDP growth rate of 6.5 to 7 percent for 2024-25.
As the budget unfolds, stakeholders will keenly observe how fiscal policies align with India’s long-term economic vision, aiming to foster inclusive growth and economic resilience in the face of global uncertainties.
