As the anticipation builds for Budget 2024, slated to be presented on February 1, 2024, the common man wonders what fiscal adjustments lie ahead. Acknowledging that its an interim budget, Finance Minister Nirmala Sitharaman has hinted at its pragmatic nature, devoid of spectacular announcements. Despite the low expectations for significant changes, there are still hopes for adjustments that could positively impact the common taxpayer.Tax rates and surcharge considerationsGiven the current moderate tax rates for various taxpayers, drastic changes are unlikely. However, theres speculation about a potential reduction in the maximum surcharge rate of 25% applicable to individuals in the highest tax bracket. This move could be aimed at easing the tax burden on high-income individuals.Extension of tax benefits for manufacturing companiesTo align with the Make in India initiative, the Government might extend the favourable tax rate of 15% for new manufacturing companies beyond the existing period of March 2024. This extension could further incentivise businesses to contribute to the countrys manufacturing growth.Enhancements in investment deductionsIn line with the shift away from investment-linked deductions, there might be an increase in limits for investments linked to the stock market. This could include instruments like mutual funds, Unit Linked Insurance Plans (ULIPs), and Exchange-Traded Funds (ETFs). Additionally, raising the limits for deductions related to health insurance premiums could be on the agenda, considering the escalating medical costs.Boosting public funding for infrastructure projectsAs the government focuses on extensive infrastructure development, avenues for public funding of such projects may see an expansion. The current investment limit of Rs 50 lakhs into NHAI bonds for claiming exemptions from capital gains tax might be raised to Rs 1 crore or at least Rs 75 lakhs. This move aims to encourage indirect infrastructure funding.Addressing home loan challengesWith high home loan interest rates and a cap of Rs 200,000 on the deduction of interest paid on loans for self-occupied property, first-time homeowners face challenges. The budget may explore measures to ease these financial burdens, potentially providing relief to those stepping into homeownership.Reviewing Securities Transaction Tax (STT) and Capital Gains TaxWhile there is public dissatisfaction with the existing securities transaction tax and long-term capital gains tax on listed shares, significant changes might not be on the horizon in this interim budget. Investors, however, will be keenly observing any adjustments that could impact their financial portfolios.
