The finance ministry is all set to present the union budget on february 21. It is uncertain what can be included and excluded from the budget however we know that this budget will be one of the most important for the BJP govt because of the 2024 general elections.

We all thought that the pandemic is over, however, the re-emergence of covid cases in our neighborhood nation china has put a question mark over another covid wave in India. If the covid returns to India it will complicate matters for the Modi govt to which is about to present the budget for 2023-24 on february 21

Covid-19 wreaked havoc in India for two straight budgets. This led to covid induced job cuts and income losses which further led to lower household income for the masses. Inflation also made the matter worse by putting more dent’s in the common man’s pocket. Needless to say the Modi govt cannot afford further things to happen. Thus they might be making this budget to provide some relief to the common people. Here are some areas in which this is possible.

Basic exemption limit: The central government has yet to change the basic exemption limit since it was last revised in the financial year 201-15 despite a general election and a once-in-a-century pandemic. Increasing the limit will provide some relief as well as reduce the burden of Income tax return(ITR) filing.

Income tax slabs: India has one of the highest income tax rates which is 42.77% after adding cess and surcharge and it is 30% without adding cess and surcharge . It is even higher than nations like Hong Kong (17%), Singapore(22%), and Malaysia(30%).many experts argue and suggest the government to increase the threshold limit for the highest tax rate as well as reduce the highest tax rate from 42% to about 35%. This will give some relief to households.

Standard deduction: The government agreed to provide a standard deduction of Rs40000 in F/Y 19 which was further increased to Rs50000 a year later. However, due to rising fuel prices and higher cost of medical expenses, the finance minister Nirmala sitharaman can increase the standard deduction limit to give some relief to the common man 

Interest rebate on home loans : Just like the basic exemption limit, the central government has not reviewed the interest rebate on home loans. With the hardening of mortgage rates, the real estate industry is asking the central government to increase the current interest rebate on home loans which currently stands at Rs 1.5 lakhs. The government might increase the interest rebate on home loans due to the fact that average house prices have increased tremendously.

Financial savings: The central govt also have yet to revise the popular section 80c.Under section 80c of the income tax act of 1961, one can claim a deduction of upto Rs 1.5 lakhs. However with the saving rate at a 19-year low at 26.2 % of GDP in the first half of 2022-23. The government might increase the limit. 

This budget has high expectations from common as well as from businesses. This will be one of the most crucial budgets for the Modi government because of the 2024 general elections

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