Maximizing Your Tax Savings: Key Expectations for Budget 2024 from EY
The anticipation is building as we approach Budget 2024, and one of the key areas of interest for taxpayers is the income tax regime. EY, a leading global firm, has put forward some crucial recommendations that they believe will benefit taxpayers if implemented by Finance Minister Nirmala Sitharaman.
Basic Exemption Limit and Standard Deduction
One of the main expectations from EY is the increase in the basic exemption limit under the new income tax regime. Currently set at Rs 3 lakh, EY suggests raising it to Rs 5 lakh to provide more disposable income in the hands of taxpayers. Additionally, they recommend raising the standard deduction threshold from Rs 50,000 to Rs 1,00,000.
Capital Gains Tax Overhaul and Housing Loan Deduction
EY also proposes an overhaul of the capital gains tax structure, including changes in tax rates and computation methods. Another important recommendation is to enhance the limit for deduction towards interest on housing loans for self-occupied properties from Rs 2 lakh to at least Rs 3 lakh.
Other Recommendations by EY
- Removing the cap of Rs 2 lakh for the set-off of house property loss against other heads in the same year.
- Increasing the tax-free threshold for gifts from Rs 50,000 to Rs 100,000.
- Including tier 2 cities in the list of metro cities for HRA exemption calculation.
- Enhancing the tax-free LTCG ceiling on the sale of equity shares.
- Providing clarity on the taxation of employer contributions to specified funds.
- Expanding deductions for the purchase of electric vehicles.
These recommendations by EY aim to simplify the tax structure and provide relief to the taxpayers by increasing exemptions and deductions. As we await the Union Budget 2024, taxpayers are hopeful that these suggestions will be considered to maximize their tax savings.
