As the eagerly awaited 2024 Budget Expectations approaches, taxpayers are looking forward to potential changes that could simplify and enhance the personal taxation landscape. Notably, Budget 2024’, to be presented on February 1, 2024 will be an interim budget. The complete budget for the financial year 2024-25 will be unveiled after the new government is formed following the general elections. Taxpayers are expecting big measures with this budget.

20% TCS on expenditure under LRS

In the last year, TCS rates have been hiked on LRS remittances upto 20% which seems extremely high. The very basic purpose to collect taxes in advance is to bring such transactions to the knowledge of the Department. However, it has unduly increased the burden of the remitter.

Revised return filling

Currently, challenges are being faced by residents claiming foreign tax credits in their Income Tax return. It should be allowed to file belated return till March 31 so that they can accurately compute their taxes.

Review Definition of Metro for HRA

The Constitution recognises seven metro cities in country including Bengaluru, Pune and Hyderabad however, under Income Tax Act these three cities are not classified as metro city for the purpose of calculation of HRA exemption, thereby leading to deduction only upto 40%. Taxpayer should be allowed to claim HRA deduction of 50% by keeping in mind the city’s cost of living.

Simplification of Capital gain Taxation

The current capital gains tax regime is very complex in nature as taxpayer has numerous factors to consider such as Period of holding, asset class, exemptions, tax rates etc. The Government should streamline and simplify the current tax structure.

Various exemptions and deductions in New Tax Regime

Currently, salaried individuals are bit reluctant to move from old tax regime to new tax regime as it will result in losing many exemptions and deductions. As a part of some relief, salaried Individuals are expecting HRA exemption and Health insurance deductions under the new tax regime too.  

Modify cut off limit for affordable housing

Affordable housing is defined as a house or apartment valued up to `45 lakh, with a carpet area of up to 90 sq metre in non-metros and villages and 60 sq metre in metros. Though the size of 60 sq m is reasonable, the price of up to Rs.45 lakh makes them unsuitable to a large share of the target audience. For instance prices in metro cities should be increased to at least 60-70 lakhs With this price adjustment, more homes will be within the reach of buyers.

Introduce relaxation in transactions with non-resident

Recently, changes pertaining to electronic Tax residency certificate, obligation to file ITR in India, obligation to obtain PAN etc.. has increased a lot of compliance cost and complexity in relation to transactions with non-residents. However, some relaxation can definitely improve the collaboration of non-residents to with Indian businesses.