Budget 2024: Will standard deduction be doubled or will the tax exemption limit increase to Rs 3.50 lakh? Expectations from the general budget

Budget 2024-25 :Will the central government double the standard deduction under the new tax regime in the upcoming budget (Union Budget 2024)? Will the tax exemption limit be increased from Rs 3 lakh to Rs 3.5 lakh in the new regime? At present, tax and consultant company Ernst & Young i.e. E&Y has expressed this hope. Mentioning the priorities of taxation reforms in the upcoming budget, E&Y has said that the government should give priority to streamlining the tax structure and improving the policy framework to promote economic growth and promoting a favorable environment for investment and growth.

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tax exemption limit

The tax and consulting company suggested that corporate tax rates should be kept stable, TDS provisions should be rationalized, and dispute resolution should be streamlined. The company said that the concessional tax system should continue without exemptions/deductions on the personal tax front. Listing the policy priorities before the new government, E&Y said that to make it more attractive, the standard deduction under the concessional tax system can be increased from the current Rs 50,000 to Rs 1 lakh or the tax rebate limit can be increased from Rs 3 lakh to Rs 3.50 lakh;

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There is no exemption in the new tax system

Under the current tax system, taxpayers can choose between the old system and lower rates and the new concessional system. While the old system provides various exemptions and deductions, the new tax regime provides a standard deduction of Rs 50,000. However, no exemptions are given. E&Y said that the government has taken several steps to improve technology and data-driven tax compliance processes. These include pre-filled returns, annual information statements, ease of tax payment, faster processing of returns and refunds.

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Will the hotel get infrastructure status?

The Federation of Hotel and Restaurant Associations of India (FHRAI) has urged the government to grant infrastructure status to all categories of hotels and convention centres built at a project cost of Rs 10 crore or more. FHRAI believes that this will give a boost to the budget segment in the hotel industry. In its pre-budget recommendation, FHRAI has also demanded rationalisation of GST and proposed a GST rate of 12 per cent on all hotels.

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Growth in the hospitality sector

FHRAI President Pradeep Shetty said that granting infrastructure status to hotels and convention centres in all cities is important to attract investments and accelerate growth in the hospitality sector. FHRAI said that one of the major requests placed by the hospitality federation before the Finance Ministry is to grant infrastructure status to all categories of hotels and convention centres built at a project cost of Rs 10 crore or more, so as to boost the budget segment in the hotel industry.

Apart from this, the Federation requested to apply 12% GST rate to all hotels. It also demanded to separate restaurant charges from room charges, as the current system of transferring GST in different ‘slabs’ in the same hotel creates compliance problems and confusion among people. According to the Federation, in its pre-budget recommendations, it has highlighted the importance of efforts under the ‘Incredible India’ campaign and recommended increasing the budget for tourism ‘branding’. It also requested to take specific measures to promote MICE (meetings, incentives, conferences and exhibitions) tourism in the country.

(Input from agency)