Budget 2024: Expectations from Budget 2024

Get ready for the upcoming fiscal year's interim budget in 2024–2025! Finance Minister Nirmala Sitharaman is gearing up to present the interim budget to Parliament, scheduled for February 1, 2024. Unlike previous budgets, this interim one won't boast any 'spectacular announcements' from the government, but it's still generating considerable buzz as it marks the final budget before the general elections.

Just a week away from the much-anticipated Budget presentation, the expectations are high, with all eyes on Finance Minister Nirmala Sitharaman to unveil a series of populist measures. The complete Union Budget, however, will be revealed post the General Elections, following the formation of the new government.

Let's delve into some key expectations for Budget 2024-25

Boost in Standard Deduction

Taxpayers are eagerly anticipating some relief in income tax, with a possible increase in the standard deduction. Last revised in 2019, experts speculate that an amendment might propose applying the standard deduction as a percentage of an individual’s salary income, ensuring fair benefits for all employed individuals.

HRA Expansion to Bangalore and Hyderabad

Employers commonly include House Rent Allowance (HRA) in employees' compensation packages. If an employee receiving HRA is paying rent for their residence, they can claim a tax exemption on this allowance.

Currently, rented houses in Delhi, Mumbai, Kolkata, and Chennai are eligible for a 50% exemption from HRA, while those in other locations fall under the 40% bracket. It's noteworthy that this classification was established over three decades ago.

Over time, cities have experienced significant demographic and economic growth, prompting the need to reassess the classification of metro and non-metro cities.

There is a growing demand to extend the 50% limit for House Rent Allowance (HRA) to cities like Bangalore and Hyderabad, considering their current high cost of living. While this higher limit currently applies to metro cities such as Chennai, Delhi, Kolkata, and Mumbai, its expansion could offer financial relief to individuals residing in other high-cost cities.

Higher Deduction Limits on Home Loan Interest

Homebuyers might witness an increase in deduction limits for interest paid on home loans, potentially lowering taxable income and making homeownership more affordable.

Support for First-Time Home Buyers

The budget could introduce new subsidies or enhance existing ones to facilitate first-time home buyers, making it financially easier for them to step into the realm of homeownership.

GST Reduction on Construction Materials

Developers and homebuyers alike are hopeful for a reduction in the GST on construction materials. This move could significantly decrease the cost of homes as developers pass on the benefits to buyers.

The Confederation of Indian Industry (CII) recommends the following changes for 

Finance Minister Nirmala Sitharaman

Launch a National Mission for Advanced Manufacturing to enhance quality and productivity.
Expand Production-Linked Incentives (PLIs) to labor-intensive sectors and those with domestic capability but high imports.
Establish Industry 4.0 innovation hubs in industrial clusters.
Incentivize rural industrial parks, especially near planned industrial corridors, to boost manufacturing in rural areas.

As we eagerly await the unveiling of the budget, these expectations set the stage for a dynamic fiscal year ahead.