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July's here, and as we inch closer to the budget, which is set to be presented around the latter half of July, there is much talk about how it will affect our pockets. Reports suggest the government is considering raising the <keyword id="20429578" type="General" weightage="20" keywordseo="standard-deduction" source="keywords">standard deduction</keyword> threshold from existing Rs 50,000 to Rs 1,00,000, amidst other things. The most common wish for a salaried employee is to reduce the income tax rates across all slabs, but at the moment, this seems unlikely. That aside, we decode the common man's wish list and what they look forward to in terms of <keyword id="22225988" type="General" weightage="20" keywordseo="income-taxes" source="keywords">income taxes</keyword> as the Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> drafts the budget. <h2>Wish 1: Raise the standard deduction to Rs 1 lakh</h2>A standard deduction is a fixed amount that you can deduct from your taxable income right away, to reduce your overall tax liability. You do not need to furnish any proofs for this amount. Currently, this stands at Rs 50,000, under both old and new tax regimes. Raising this threshold to Rs 1,00,000 will mean more disposable income in your hands. And as per the policy experts, this is the most likely change that we can expect under the new budget. <h2>Wish 2: Increase the <keyword id="20228341" type="General" weightage="20" keywordseo="basic-exemption-limit" source="keywords">basic exemption limit</keyword> in new tax regime</h2>As per EY's pre-budget expectation report, an increase in the basic exemption limit from the present Rs 3,00,000 to Rs 5,00,000 would immensely benefit the common man. Earlier, this limit was set at Rs 2,50,000. Note that unless you specifically opt for the old regime, the new tax regime is considered as your default choice starting 2023. If your annual income is equal to, or falls below this basic exemption limit, you do not have to pay any income tax. <h2>Wish 3: Increase tax-free limit of LTCG gains </h2>At present, if you sell any equity mutual fund unit or share after more than 12 months of holding it, you'll have to pay a 10% long-term capital gains (LTCG) tax. However, within one financial year, long-term capital gains below Rs 1,00,000 are tax-exempt. As EY's report notes, raising this extant tax-free limit to Rs 2 lakh would be beneficial, especially in boosting long-term investing sentiment in the country. But will this come true? Only Nirmala Sitharaman knows! <h2>Wish 4: Consider some tier-2 cities as metros for HRA exemption </h2>Residents of Gurugram, Noida, Bengaluru, listen up! HRA, or House rent allowance is a crucial component of our salary, and hence, our tax planning as well. You can get HRA exemption on the lowest amount amidst these 3: 1. Actual HRA received 2. 50% of salary for metro cities (Delhi, Mumbai, Kolkata, Chennai) 3. 40% of salary for non-metro cities 4. Rent paid- 10% of salary But its no secret that residents of nearby cities like Noida, Gurugram, Faridabad, or rapidly developing urban hubs like Pune, Ahmedabad, Ghaziabad, Hyderabad, Bengaluru, Thane bear the brunt of sky-high residential rents that takes a huge toll on their monthly income. Yet, they cannot claim 50% of their salary for HRA exemption. Since these cities has been classified as a non-metro, residents can claim a maximum of 40% of their salary as exemption. In case rent exceeds Rs 1,00,000 annually, you are also required to furnish the PAN details of landlord, along with a formal rental agreement. Consider this. You live in Delhi, and have an annual income of Rs 10,00,000. For HRA purposes, you can claim exemption of up to Rs 5,00,000, since Delhi is considered a metro. But, if you live in Ghaziabad, or Noida, the limit available to you sharply falls down to Rs 4,00,000. This budget, as reports note, considering these cities as metros for tax purposes would provide some relief to the common man's pocket. Per a recent report by ANAROCK research, the top 7 cities in the country (Mumbai metropolitan region, Hyderabad, Bengaluru, Pune, Delhi NCR, Chennai and Kolkata) saw an average price rise between 13-39% on a yearly basis. In fact, it was Hyderabad recorded the highest yearly price rise in residential property last quarter, jumping by as much as 39%. <h2>Wish 5 : Enhance exemption limits under the old regime</h2>The list is endless, but so are our wishes! Experts are also suggesting an enhancement in the existing limit for deduction towards interest on housing loan for self-occupied house. From its present limit of Rs 2 lakh, it should be taken to Rs 3 lakh. Also, the Rs 2-lakh cap on set off of house property loss against other heads in the same year should be done away with. For senior citizens, there should also be greater clarity on how funds received from <keyword id="19919089" type="General" weightage="20" keywordseo="nps" source="keywords">NPS</keyword> (National Pension System) via the systematic lumpsum withdrawal plan should be taxed. Well, we can only hope some, if not all of these wishes come true when finance minister presents the union budget in the parliament this month.

Budget 2024: Increase standard deduction, exemptions and more, an aam aadmi's wishlist

<ul><li>The <keyword id="6374875" type="UNKNOWN" weightage="20" keywordseo="itr">ITR</keyword> forms now require additional details </li><li>There are changes in the <keyword id="3690072" type="PERSON" weightage="20" keywordseo="LTCG-tax">LTCG tax</keyword>, surcharge on total income, tax on income from house property and tax slabs </li><li> The deadline to file the returns is 31 July. </li></ul> The 2017 <a href="https://www.indiabudget.gov.in/">Budget</a> made a lot of changes in the filing of <keyword id="6355828" type="UNKNOWN" weightage="20" keywordseo="income-tax-returns">Income Tax Returns</keyword>. It is important to take care of these <a href="https://www.moneycontrol.com/news/business/personal-finance/here-are-some-important-changes-in-itr-filing-process-that-you-should-not-ignore-as-you-file-your-returns-2764231-7.html">changes </a>so that you can save yourself the effort and time of filing a revised return in case you commit any errors. The deadline to file the returns is 31 July. Tax slab decreases Income is categorised into different groups based on its amount and each such group is known as tax slab. Tax is charged at different rates for different slabs. The <keyword id="6354751" type="UNKNOWN" weightage="20" keywordseo="income-tax">income tax</keyword> slab rates have changed for the Annual Year 2019. For individuals with taxable income between ₹2.5 - 5 lakh, the tax has been reduced from 10% to 5%. The tax slab for individuals earning ₹5 - 10 lakh, and for those with income above ₹ 10 lakh, remain 20% and 30% respectively. Modification in tax on income from house property Section 24B allows you, as an individual, to make certain deductions from the net annual value of your house property. In the previous year, the entire amount was allowed to be deducted under Section 24B on the interest paid on home loan. However, it has now been restrict to ₹2 lakh. Furthermore, earlier a complete loss set-off from your house property was allowed. There was no ceiling on the amount. However, now the loss has been restricted to ₹2 lakh in one financial year. The remaining loss can get carried forward for the next eight years. Amendments in LTCG tax Earlier, long-term capital gains (LTCG) tax was claimed on an immovable property with the holding period of three years. It has now been reduced to two years, from AY19. Furthermore, the base year for tax indexing for determining the LTCG tax has been revised from <a href="https://economictimes.indiatimes.com/wealth/tax/budget-2017-shifted-indexation-calculation-base-to-2001-who-gains/articleshow/57034487.cms">1981 </a>to 2001. This means that the purchase price of an asset bought before 1 April 1981 could be calculated on the basis of the fair market value of 1981, however, from now onwards, the purchase price will be calculated based on the fair market value of 2001. New surcharge on total income Earlier the surcharge was 15% of income tax, only if the total income exceeds ₹1 crore. From AY19 a 10% surcharge will be applicable if the total income is between ₹50 lakh and ₹1 crore. If the income exceeds ₹1 crore, a surcharge of 15% would be required. Also, Section 87A earlier provided a rebate up to ₹5,000, but the same has been lowered down to half the amount, that is, upto ₹2,500. Need of additional details in ITR forms Sahaj or ITR-1 form, used by most of the salaried class, will now require additional details related to the break-up of your salary, such as details of perquisites, allowances etc. It would also require detail of income from your property including rental income, tax given to local authority, etc. Also, in the new ITR form, details of the exemption of capital under section 54 of the Income Tax Act need to be mentioned separately in relevant columns. Furthermore, the old ITR-4S tax form, mostly for businesses, has been renamed ITR-4 and would now need additional details such as secured/unsecured loan details, fixed assets, capital account, etc. Turnover details and GST declaration Taxpayers have to specify the exact turnover details while filing Goods &amp; Services Tax (GST) and would further need to mention the GST detail while filing their ITR. General advice <ul><li>You should keep all important documents in one place before you begin to file your returns. It will save time and reduce errors. </li></ul><ul><li>You must also claim all tax benefits and deductions properly, even if you forgot to mention them in your tax declaration. </li></ul><ul><li>You must note whether the interest you earn from your recurring deposits (RD) and fixed deposits (FD) are fully taxable at the applicable slab rates or not. Interest earned up to ₹10,000 from savings bank account is exempt under Section 80TTA.</li></ul>

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Budget 2024: Increase standard deduction, exemptions and more, an aam aadmi's wishlist

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Keep these changes in mind while filing your ITR to prevent errors

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