Budget 2024: Anticipated Tax Relief and the 8th Pay Commission

Budget 2024

Finance Minister Nirmala Sitharaman is set to unveil the full Union Budget for the fiscal year 2024-25 in the latter half of July. This presentation follows the Interim Budget she delivered in February, just before the Lok Sabha elections. With the new government now in place, stakeholders from various sectors are keenly awaiting the detailed budget for FY 2024-25.

Anticipations from Salaried Taxpayers

Salaried taxpayers, who contribute significantly to income tax revenues, are hopeful for positive changes from FM Sitharaman. Their primary expectations include:

1. Reduction in Income Tax Rates

There is a strong anticipation for a reduction in income tax rates to boost disposable income and stimulate spending. Currently, income tax rates range from 5% for income above ₹2.5 lakh annually to 30% for income exceeding ₹15 lakh per year. Since the Interim Budget did not change these rates, taxpayers are hopeful for revisions in the Full Budget for FY 2024-25, which could enhance economic activity and increase GST collections.

2. Formation of the 8th Pay Commission

Government employees are looking forward to the establishment of the 8th Pay Commission to address the rising cost of living. Traditionally, pay commissions are set up every 10 years to review and recommend salary revisions for government employees. The last commission was established in 2014, with its recommendations implemented on January 1, 2016.

3. Increase in 80C Exemption Limits

Taxpayers are advocating for an increase in the tax exemption limit under Section 80C of the Income Tax Act, 1961. The current limit stands at ₹1.5 lakh per annum, and there is a call to raise this limit to at least ₹2 lakh annually. Additionally, taxpayers seek a broader range of eligible investment options under this section.

Read More: Eight Essential Tips for First-Time Taxpayers Filing Their ITR for FY 2024

As the budget announcement nears, the hopes and expectations of salaried taxpayers and government employees are high, with many looking forward to potential tax relief and salary revisions.

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