As the Union government prepares to unveil its Budget for 24-25, the aspirations of the common man are manifold. They yearn for immediate relief from the rising cost of living, simplified tax rules and measures that encourage saving and investment.
But they also want a budget that empowers them financially, supports small businesses, and fosters a thriving economy.
Here's the list of people's expectations from the Budge:
Inflation-adjusted standard deduction
With inflation steadily eroding purchasing power, a significant increase in the standard deduction is a top priority. The current deduction of Rs 50,000 has remained unchanged for five years and is no longer sufficient to cover basic living expenses. Raising it to Rs 1,00,000 would provide much-needed relief and put more money in the hands of taxpayers.
Reimagined I-T slabs and rates
The middle class, a significant driver of economic growth, is looking for substantial tax relief. Restructuring the income tax slabs and rates, particularly for those earning between Rs 5 lakh and Rs 15 lakh per annum, would significantly increase their disposable income. This could spur consumption and revitalise the economy.
Turbocharging savings & investments
The budget should encourage a culture of saving and investment. This can be achieved by increasing the limit under Section 80C, which allows deductions for investments in various instruments like life insurance, provident funds and equity-linked savings schemes (ELSS). Additionally, the new tax regime, though gaining popularity, needs further enhancements. Introducing deductions for medical expenses, home loan interest, donations etc would attract more taxpayers to this regime and boost overall savings.
Rewarding savers & senior citizens
Increasing the tax exemption limit on interest income from various sources is another key expectation. Raising the limit for savings account interest from Rs 10,000 to Rs 25,000 would incentivise savings, especially for those with limited income. Additionally, senior citizens, who rely heavily on interest income, would benefit greatly from an increased exemption limit under Section 80TTB, which is currently capped at Rs 50,000.
Simplified capital gains tax regime
The current capital gains tax structure, with its different rates for various asset classes and holding periods, is complex and often confusing for taxpayers. A simplified, more transparent system would make it easier for individuals to understand their tax liabilities and comply with the regulations. This would not only reduce compliance burdens but also encourage greater participation in the capital markets.
Ease of doing business & regulatory reforms
Beyond tax reforms, there is a strong desire for a more business-friendly environment. Streamlining regulations, reducing compliance burdens for startups and small businesses, and simplifying the tax structure, particularly GST, would foster innovation and growth, and create more jobs. Small businesses also hope for a simplified regulatory framework under the Companies Act, particularly easier compliance procedures related to the Ministry of Corporate Affairs (MCA) portal.
Strengthening the social safety net
While economic growth is important, it should be inclusive. The common man expects the government to allocate adequate resources towards healthcare, education, and social welfare programs. This includes measures to improve the quality and accessibility of healthcare services, enhance educational opportunities for all, and provide financial assistance to vulnerable sections of society.
In conclusion, Budget 2024 has the potential to be a game-changer for the common man. By addressing their concerns and aspirations, the government can create a more equitable and prosperous society. The budget should not only provide immediate relief but also lay the groundwork for sustainable economic growth and financial security for all citizens.
(Subin V R is a chartered accountant. Views expressed are personal)