Union Budget 2024-25: Four income tax benefits you could expect from Finance Minister Nirmala Sitharaman. Details here

Finance Minister Nirmala Sitharaman will present the Interim Budget 2024-25 on February 1, 2024. While, it's very likely that major announcements may hold off until after the 2024 Lok Sabha Elections. “The upcoming Union Budget presents an opportunity to address lingering concerns and set the stage for future economic growth. It is most likely that this budget would prioritise fiscal discipline and avoid populist measures,” said Archit Gupta, Founder, and CEO, of ClearTax.

However, there is optimism for potential relief in the realm of personal income tax, particularly in the New Tax Regime, Gupta added.

Here are income tax benefit expectations from Budget 2024

80D deduction limit

The deduction limit under Section 80D for medical insurance premiums should be increased from ₹25,000 to ₹50,000 for individuals and ₹50,000 to ₹75,000 for senior citizens, reflecting rising healthcare costs.

"Extending Section 80D benefits to the new tax regime would promote equitable access to healthcare, said Archit Gupta.

Ease TDS compliance for home buyers

“Currently, 1% TDS is deducted on property purchases exceeding ₹50 lakh. While this process is straightforward for resident sellers (using Form 26QB), it becomes more complex for Non-Resident Indian (NRI) sellers,” said Gupta.

Simplification of capital gains taxation

The complexity of the current capital gains tax regime poses challenges for investors, with numerous factors to consider, such as asset classes, holding periods, tax rates, and residency status. 

“The government should streamline the classification of equity and debt instruments, unify tax treatment for listed and unlisted securities, and simplify indexation provisions,” said the CEO of ClearTax.

Bengaluru to be considered a metro city for HRA exemption

Despite being recognised as a metro city by the Indian Constitution, Bengaluru remains classified as a non-metro for income tax purposes, 

According to Gupta, this is limiting HRA deductions to 40% for its residents instead of the 50% available in other metro cities.

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