Common Man’s Budget 2024: FM Nirmala Sitharaman Grants Increased Deduction Limits and Other Benefits

The Union Budget of 2024 is eagerly awaited by salaried individuals, as there is a strong hope for several amendments that would benefit the common man. As the clock ticks towards the budget announcement on February 1, one can sense the anticipation among the masses. Let’s delve into the key expectations from the Finance Minister Nirmala Sitharaman for the forthcoming budget.

Revision in limit of deduction available under Section 80C

The current deduction available under Section 80C is capped at ₹1.50 lakh per year, encompassing Section 80CCC and 80CCD(1). The ongoing limit was set at ₹1.50 lakh after a revision from ₹1 lakh in 2014. However, financial experts argue that the meagre increment does not align with the inflation rate, and there is a fervent appeal to increase it to a minimum of ₹2.50 lakh. This adjustment is imperative to make the deduction limits more attuned to the present economic scenario.

Changes in tax slabs

The unaltered tax slabs since 2014 have imposed a growing burden on households, leading to heightened tax rates each year. Advocates are calling for a restructuring of tax slab limits to counteract rising expenses. The proposed augmentation in tax slabs would inject more liquidity into the hands of middle-class consumers, effectively mitigating the impact of escalating living costs without inflicting any fiscal strain.

Tax provisions on NPS withdrawals

A noteworthy point of contention revolves around the tax treatment of withdrawals from the National Pension System (NPS). Currently, only up to 60% of the NPS corpus at the time of account closure is exempt from tax, necessitating the purchase of an annuity for the remaining portion, which subsequently becomes taxable. This prompts the plea for the entire NPS corpus to be made tax-free at the time of withdrawal, thereby eliminating the mandatory annuity purchase and granting the subscriber the autonomy to decide the investment allocation.
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Introduce separate limit for Principal repayment

Drawing attention to the current provisions of Section 80C, which allow a deduction of up to ₹1.5 lakh for the repayment of the principal amount of a housing loan, there is a clamor for a distinct deduction for home loan repayments. This proposal seeks to alleviate the congestion within Section 80C and underscore the necessity for a dedicated deduction for home loan repayments. Aligning it with the precedent set by the introduction of a separate deduction for first-time home buyers in 2019 would significantly alleviate the financial burden on home loan borrowers. The forthcoming Interim Budget of 2024 is poised to address these expectations, steering the fiscal trajectory towards a more equitable and inclusive landscape. Nonetheless, with Finance Minister Nirmala Sitharaman downplaying the prospects of substantial announcements in the interim budget, the anticipation is tempered by the looming specter of the impending elections. The budget is envisaged to function as a vote-on-account, casting a shadow of uncertainty over the fruition of the aforementioned expectations. In conclusion, while the expectations are palpable, the veracity of their realization hinges on the government’s prerogative and the contours of the upcoming budgetary dispensation. — I structured the article by incorporating the essential expectations and recommendations for Budget 2024, elucidating each segment in detail. The objective is to provide the reader with a comprehensive understanding of the key areas garnering significant attention. At the end, I expounded on the context surrounding the budget and the plausible implications for the common man. If you need further revisions, please feel free to let me know.

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