Taxpayers eagerly await Finance Minister Nirmala Sitharaman‘s maiden budget under Modi ‘3.0’ as Budget 2024 draws near. One much-awaited adjustment is the possible raise in the salaried individuals’ standard deduction ceiling, which is now set at ₹50,000. There are rumors that the Union Budget 2024 may include a moderate modification, possibly increasing the cap between ₹60,000 and ₹1,00,000.
In this budget, will the Standard Deduction be raised?
Experts in personal finance are upbeat about a prospective rise in the standard deduction caps.
The present deduction of ₹50,000, which was established in 2018–19, might gradually expand to ₹60,000 or even ₹70,000, according to Ashish Aggarwal, Director at Acube Ventures. This would be welcomed by salaried personnel as it reduces their taxable income.
Associate Director at Fincorpit Consulting Gaurav Singh Parmar observed that there is a lot of interest in raising the standard deduction, which is now capped at ₹50,000. Parmar stated, “Predictions indicate that it may rise to ₹75,000 or even ₹1,00,000.”
Raising the standard deduction might help taxpayers in lower and middle-class brackets by lowering their taxable income and total tax payment, according to Abhishek Soni, CEO and co-founder of Tax2win.
Soni further stated that raising the standard deduction intends to ensure equitable taxation for all income levels while promoting consumer spending and the economic recovery.
The salaried class has high expectations for the upcoming budget, according to Divya Baweja, a partner at Deloitte India. She suggested potential measures like lowering the top tax rate under the new tax regime and making the standard deduction more appealing beyond its current ₹50,000 threshold.
Standard deduction: what is it?
Workers may deduct a standard deduction of up to ₹50,000 from any taxable income that falls under the “Salaries” category throughout a fiscal year. Whether the salary is received in advance, in arrears, or for the current period, this deduction is applicable.
In the 2018 budget, the standard deduction was first implemented at ₹40,000. In the 2019 budget, it was raised to ₹50,000. Since then, the deduction amount has remained unchanged.
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Furthermore, as mentioned by ClearTax tax expert Megha Jain, this benefit was extended to taxpayers under the new tax framework in Budget 2023.
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