- Date : 01/01/2024
- Read: 3 mins
Here’s what the experts want to see in the next and final budget presentation from the ruling government in the election year 2024
2024 is the general election year in India, which means that the Union Budget will be presented in two phases. The first of February will see the presentation of the interim budget, followed by the annual budget after the elections.
Interim budgets, by practice, are devoid of sweeping policy changes or new programmes. It is likely to address the necessary and unavoidable expenses only.
Farmer benefits, pension scheme for unorganised labour, increase in gratuity cap, etc. were key highlights of the last interim budget in 2019
A vote on account contains government expenses, while an interim budget includes receipts and payments
Interim budget is in practice as an incumbent government cannot present a full Union Budget in the election year
Interim Budget 2024
Finance Minister Ms Nirmala Sitharaman has already clarified that the interim budget will not have any spectacular announcements. It will be a vote on account budget which will seek to meet the government expenses till the time a new government is in place.
Interim budgets can still underline and showcase the achievements of the government over the last five years.
Key Expectations from Interim Budget 2024
- Given the rising medical inflation, tax experts are expecting a rise in the deduction limits of medical insurance premiums.
- A similar hike in section 80C is also high on the wish list. There has been no increase in this section since 2014-15.
- Like medical, educational expenses are also on a constant rise. Introducing a separate deduction for children’s education, which includes non-tuition expenses, would please many taxpayers.
Many experts are also expecting a simplification in the capital tax regime. There is a hope that the long-term capital gain limit on equity investments may be raised from Rs 1 lakh to Rs 2 lakh.
Also on the wish list is the reintroduction of section 80CCG. This will offer deductions on investments made in diversified mutual funds, including index funds. This would encourage wider retail participation in the stock market.
One of the shocks of last year’s budget was the categorisation of debt funds under slab-based taxation without indexation benefits. A rollback of this rule would be widely applauded as well.
Simplification in the taxation of employee stock option plans and inclusion of sovereign gold bonds in section 80C are seen as steps that can trigger fresh interest among investors and corporations.
It remains to be seen whether this is pushed back to the annual budget or not.
The recent state election results have been a confidence booster for the ruling government. This may influence the drafting of the interim budget while excluding populist steps. It would be wise to hope for the most and expect the least from the interim budget.
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