Budget 2024 Expectations: Hike In Tax Exemption Limits To Support For Women Entrepreneurs, Here's What The I-T Sector Hopes For

From tax exemption limits to support for women entrepreneurs, there are several expectations regarding the income tax steps that the forthcoming budget should adopt, experts said

Union Finance Minister Nirmala Sitharaman is set to release the Interim Budget for the upcoming fiscal before the new government steps in on February 1, 2024. From tax exemption limits to support for women entrepreneurs, there are several expectations regarding the income tax steps that the forthcoming budget should adopt. Let’s take a look at these expectations to understand what the public is looking for in the upcoming budget in terms of tax revisions.

Tax Exemption Limits

Experts stated that the public could be looking forward to seeing an increase in the overall tax exemption limit for individual taxpayers under section 87A from the current cap of Rs 7 lakh to Rs 8 lakh. Further, there is an expectation for parity in taxation among companies, partnerships, and limited liability partnerships, Narayan Jain, National President, All India Federation of Tax Practitioners, said. 

The association executive further noted, “This is going to be an interim budget but at least there may be some indications of full-budget benefits,” reported PTI. 

N G Khaitan, President, Bharat Chamber of Commerce, stressed the need for a long-term taxation policy and sought parity in taxation among companies, partnerships, and limited liability partnerships (LLPs) to ensure that the ‘playing field’ is equal for small and medium entities. “MSMEs, which have a huge contribution to the country's GDP and employment generation, are subjected to higher taxation,” he added. The expert further noted that some actions are expected to mitigate the burden on salaried individuals with a reduction in the personal taxation front and enhance consumption and savings. 

Hybrid Scheme For Personal Taxes

Vivek Jalan, fiscal affairs and taxation committee chairperson, Bengal Chamber of Commerce, stated that a simplified single hybrid scheme is expected for personal income taxation along with certain deductions. “The government needs to prioritise its 'Vasudeva Kutumbakam' (the whole world is one family) roadmap and India's leadership role in green manufacturing,” he noted. 

Further, Jalan said that customs duty on capital goods and raw materials such as lithium-ion cells for electric vehicles can also be lowered to give a push to green energy initiatives. The executive hoped that the Budget would look into establishing a government-facilitated settlement mechanism for customs disputes and a tribunal specifically for resolving GST-related concerns.

Tax Relaxations For Women Entrepreneurs

Experts also advocated for tax relaxations for women entrepreneurs. Radhika Dalmia, Chairperson, FICCI Ladies Organisation (Kolkata chapter), expressed hope that the forthcoming Budget should focus on providing tax concessions to women entrepreneurs and allow for more paid holidays for working mothers. She also said that hiking the allowance under the Rashtriya Swasthya Bima Yojana and increasing education benefits for girls are important measures that can be taken in this aspect. 

Further, Dalmia made a case for boosting financial inclusion and healthcare infrastructure, along with giving education more importance, especially for girls, as a crucial step for moving towards a more ‘inclusive Bharat’.

Regulation Of E-marketplaces

Another expert in the field called for strengthening the regulatory framework around e-marketplaces. Vinaya Varma, MD and CEO, Mjunction Services, noted, “I think the role of export on e-marketplaces will become important with the government’s focus on Made in India. Therefore, a regulatory framework that acknowledges e-marketplaces as responsible players in facilitating cross-border payments, potentially granting them specific roles in the release or holding of funds based on pre-defined criteria and agreements, will be welcome.”

Further, Varma said that the Interim Budget should review the TDS which is mandatory for the eCommerce platforms to deduct and deposit for payments made by the buyers. He also called for prioritising sustainable energy, digital adoption in manufacturing, and boosting credit for MSMEs.