Finance Minister Nirmala Sitharaman is set to present the full Union Budget for the fiscal year 2025 in the second half of July. Previously, in February, she presented an Interim Budget ahead of the Lok Sabha elections. With the new government in place, stakeholders from various industries are eagerly anticipating the comprehensive budget for FY 2024-25.
High Hopes from Salaried Taxpayers
Salaried taxpayers, a significant contributor to income tax revenue, are hopeful for favorable announcements from FM Sitharaman. Here’s what they expect:
1. 8th Pay Commission
Government employees are anticipating a revision of their salaries in line with the current cost of living. The formation of the 8th Pay Commission is highly awaited, as pay commissions are traditionally set up every 10 years to review employee salaries. The last pay commission was established in 2014, with its recommendations implemented on January 1, 2016.
2. Lowering Income Tax Rates
There's a strong expectation for a reduction in income tax rates to boost spending. Currently, income tax rates range from 5% for income above ₹3 lakh annually to 30% for income exceeding ₹15 lakh per year. With the Interim Budget leaving tax rates and slabs unchanged, taxpayers are hopeful for revisions in the Full Budget for FY 2024-25, which could spur economic activity and increase GST collections.
3. Increase in 80C Exemption Limits
Taxpayers are calling for an increase in the tax exemption limit under Section 80C of the Income Tax Act, 1961, which currently stands at ₹1.5 lakh per annum. There's a demand to raise this limit to at least ₹2 lakh annually and to expand the range of eligible investment options.
Pre-Budget Consultations Underway
The Finance Minister has begun pre-budget consultations with various industry groups. As the date for the Union Budget 2024 presentation approaches, the salaried class is looking forward to potential tax reliefs and incentives for investments, especially in government-backed savings schemes.
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