Budget 2024: Salaried Taxpayers Expect Increase In Standard Deduction, Section 80C Limit

Increase Basic Exemption Limit: “The basic exemption limit has stayed at Rs 2.5 lakh for many financial years. In the new tax regime, it is slightly higher at Rs 3 lakh. Considering rising food prices, moderate income growth, and increased living costs, it is recommended that the basic exemption limit be raised in both tax regimes,” says Singh. Increase In Home Loan Interest Deduction: At present, the deduction for interest on housing loans for self-occupied properties is capped at Rs 2 lakh, a limit unchanged for nearly a decade. With property prices rising in India, this limit should be increased to at least Rs 4 lakh to benefit middle-class taxpayers. Increase In Threshold Limit Of Section 80C: Section 80C is one of the most talked about provisions of the Income-tax Act, 1961. It allows a deduction of up to Rs 1.50 lakh for investments in Employees’ Provident Fund (EPF), Public Provident Fund (PPF), payment of life insurance premium, the principal repayment of home loans, children’s education expenses, and so on. Since the threshold limit under this Section is just Rs 1.5 lakh, there is very little scope left for taxpayers to make further investments. Consequently, various investment schemes have been losing the sheen.It is suggested that the maximum deduction under Section 80C should be increased to Rs 2.5 lakh.HRA–Add More Cities To Metropolitan Cities Under Umbrella: An employee can claim exemptions for HRA if he/she pays rent for his/her residential accommodation. As of now, higher deductions are allowed if the employee is living in any of the four metropolitan cities, i.e., Delhi, Mumbai, Kolkata, and Chennai.At present, the rental charges for houses in Bengaluru or Hyderabad are equal to or higher than what a tenant has to pay for an equivalent house in, say, Delhi or Kolkata. Many Indian cities have developed employment opportunities in the last two decades, and accordingly, rental charges have also increased manifold. Therefore, there is an urgent need for the inclusion of many other cities in this category, such as Bengaluru, Hyderabad, Pune, Ahmedabad, Jaipur, Noida, Gurgaon, etc.

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