As Finance Minister Nirmala Sitharaman gears up to present the Interim Budget 2024-25 on February 1, 2024, there is a keen anticipation of impactful announcements. ClearTax CEO, Archit Gupta, underscores the significance of this budget, emphasizing the need for fiscal discipline and pragmatic economic measures. This article explores ClearTax’s CEO recommendations for Budget 2024, focusing on crucial areas such as medical insurance premiums, capital gains tax regime, and the perplexing income tax classification of Bengaluru.
1. Prioritizing Healthcare: 80D Deduction Limit
ClearTax advocates for a substantial increase in the deduction limit under Section 80D for medical insurance premiums. Gupta suggests elevating the limit from ₹25,000 to ₹50,000 for individuals and from ₹50,000 to ₹75,000 for senior citizens. This adjustment aligns with the escalating healthcare costs and promotes equitable access to healthcare.
2. Tackling TDS Compliance for Home Buyers
Gupta highlights the complexities faced by Non-Resident Indian (NRI) sellers in the current 1% TDS deduction on property purchases exceeding ₹50 lakh. While the process is straightforward for resident sellers, there is a call for simplifying the compliance procedures for NRIs, ensuring a seamless transaction process.
3. Simplification of Capital Gains Taxation
The current capital gains tax regime is marked by complexity, posing challenges for investors. ClearTax urges the government to streamline the classification of equity and debt instruments, unify tax treatment for listed and unlisted securities, and simplify indexation provisions. This move aims to create a more investor-friendly environment.
4. Bengaluru’s Tax Classification: Aligning with Reality
Despite its recognition as a metro city in the Indian Constitution, Bengaluru faces a disparity in its income tax classification. Gupta points out that Bengaluru is currently treated as a non-metro for income tax purposes, limiting HRA deductions to 40% instead of the 50% available in other metro cities. Rectifying this classification is crucial for fairness in tax exemptions.
Conclusion
The upcoming Union Budget presents a pivotal moment to address economic concerns and lay the foundation for future growth. ClearTax’s CEO recommendations underscore the importance of a progressive fiscal policy that addresses key issues in healthcare, real estate transactions, and tax classifications. As we await the budget unveiling, these proposals advocate for a pragmatic approach that prioritizes both fiscal discipline and the economic well-being of the citizens.
FAQs:
- Why is there a need to increase the 80D deduction limit for medical insurance premiums?
- The increase is essential to reflect rising healthcare costs and promote equitable access to healthcare.
- What complexities do Non-Resident Indian (NRI) sellers face in the current TDS deduction on property purchases?
- NRIs encounter challenges in complying with the 1% TDS deduction process, requiring simplified procedures for a seamless transaction.
- Why is the simplification of capital gains taxation crucial for investors?
- The complexity of the current regime poses challenges for investors, and simplification aims to create a more investor-friendly environment.
- Why does ClearTax emphasize aligning Bengaluru’s tax classification with its metro city status?
- Despite constitutional recognition as a metro city, Bengaluru’s current non-metro classification hinders fair HRA deductions, warranting alignment.
- What is the significance of these CEO recommendations for the common taxpayer?
- These recommendations, if implemented, can result in a more equitable and simplified tax system, positively impacting the financial well-being of taxpayers.
