Budget 2024: Even before the 2019 Lok Sabha elections, the Modi government had increased the limit of standard deduction from Rs 40,000 to Rs 50,000 in the interim budget.
Union Budget 2024: In the interim budget to be presented in the Parliament before the Loksabha Elections 2024 to be held after three months, the Modi government is planning to provide relief from inflation to salaried and pensioners. It can give a big gift on the tax exemption front. Finance Minister Nirmala Sitharaman may increase the limit of Standard Deduction from the current Rs 50,000 to Rs 75,000 in the interim budget to be presented on February 1, 2023.
Benefit of standard deduction in both tax regimes!
Standard deduction can also be increased so that its benefit can be availed by taxpayers opting for both the old or new income tax regime. In the budget presented on February 1, 2023, the Finance Minister had announced to provide the benefit of standard deduction to salaried and pensioners who opt for the new tax regime. Standard deduction was implemented in the budget presented for the financial year 2018-19. Earlier, till the financial year 2017-18, taxpayers could claim tax exemption if they spent Rs 19,200 on transport account and Rs 15,000 on medical bills annually. However, to get tax exemption on this expenditure, taxpayers had to submit the bill. But in the budget presented in the year 2018, instead of these two provisions, standard deduction was directly implemented so that taxpayers can be freed from the burden of submitting documents.
Preparation for increase in standard deduction!
Salaried class and pensioners could claim standard deduction up to Rs 40,000 and get tax exemption for which there was no need to submit any documents. But in the interim budget presented before the 2019 Lok Sabha elections, the Modi government increased the limit for claiming standard deduction from Rs 40,000 to Rs 50,000. Now in the interim budget to be presented before the elections, Modi government can again increase the limit of standard deduction from Rs 50,000 to Rs 75,000.
Preparation to take electoral advantage
The budget that the Finance Minister will present on February 1, 2024 is not a full but an interim budget. It has been a tradition that in the interim budget, the government does not take any major decisions on the front of giving tax exemptions. But to provide relief to the common people from the back-breaking inflation in the country, the government can increase the limit of standard deduction so that taxpayers choosing both types of tax regimes can take advantage of it and Modi government can get the electoral benefit of this decision in the Lok Sabha elections.
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