FINANCEOUTLOOKINDIAJANUARY, 20248On February 1, 2024, Nirmala Sitharaman, the Finance Minister, will lay out the ne w budget for the Modi governme nt. Let's not forget, since the temporary budget of 2019, Sitharaman's upcoming budget counts as the sixth, exce pt for the one by Velocita Rame n.Before diving into ke y changes and highlights of past budgets, it's vital to acknowledge the important part played by personal income tax rates. They often be-come the top consideration in budge t talks, especially when it concerns broader insights and update s on budget matters.In 2019, the gove rnment made a big change. The-y decided to change the tax system. The idea was to he lp regular people by making income tax rates lowe r. They also changed the tax bracke ts. The main purpose? To make taxe s less hard on people and simplify the confusing stuff in the income tax rules.With this plan, they made personal tax paying easier. The y lowered tax rates for people with ke y exemptions and deductions. This was all about making taxe s simpler for everybody. In the budgets of 2023 and 2024, they eve n tweaked tax brackets again. This re-inforced the new format as the norm. However, people were given a choice . They could use the ne w or the old system. Now, here 's how the new tax rules look:1. Income up to thre e lakh rupees? No tax ne eded2. Bring in over thre e lakh but under five lakh? You're looking at a 5% tax rate3. Earn more than six lakh but less than nine lakh? Watch out for a 10% income tax4. If your income is somewhe re betwee n 12 lakh and 50 lakh, there's a 20% income tax rate 5. Earning more than 50 lakh? Prepare for a 30% income tax burdenThe update d setup targets giving people a straightforward, step-by-ste p tax system. It empowers taxpaye rs to pick the best choice for the ir money situation. Annual Investment LimitToday, taxpayers are constantly looking for new exclusions and strategies to reduce their income tax bills. The Modi government planned to promote more engagement in the banking sector in its first post-2014 budget, encouraging consumers to deposit their savings and earnings in financial institutions. As part of this endeavor, the annual investment limit under Section ATC was increased dramatically, from 50,000 to 1.5 lakh rupees.Individuals can use it to lower their taxable income by making tax-saving investments or incurring qualified expenses. This change in the investment limit aimed to give taxpayers more alternatives for savings and investment, in line with the government's goal of encouraging a culture of financial inclusion and careful spending; prudent saving practices within the banking framework. These encompass investments in provident funds, payments directed towards insurance premiums, and participation in equity-linked saving schemes. There's a growing anticipation that the 2024 budget might elevate this limit to approximately two lakh rupees or potentially expand the range of instruments eligible for these exemptions, including considerations related to the principal sum on home loans. Goods and Services Tax (GST)The spotlight move d to indirect tax when a huge change happened. This was the start of the Goods and DECIPHERING INDIA'S BUDGET 2024: TAX, GST, IBC, AND GDP
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