Ahead of the Union Budget 2024, IT industry veteran and former CFO of Infosys, Mohandas Pai, has advocated for some tax relief for the middle-class, who he believes are burdened by high taxes. Pai sees middle-class taxpayers reeling under high taxes and inflation as well as living a poor quality of life. He has appealed to Prime Minister Modi to reform the current taxation policies to benefit the middle-class.
Taking to social media platform ‘X’ recently, Pai said, “Some feed back for our PM@narendramodi middle class is very angry and upset at the high tax burden they have, increasing costs of power, milk, transport, poor quality of life, increasing freebies to buy votes. IT for middle class is very high because of inflation. Pl change”.
Highlighting dissatisfaction with the current tax structure, Pai, who also served as HR Director at Infosys, urged the Prime Minister to initiate tax reforms aimed at improving the situation for middle-class taxpayers.
India Inc also seeks tax relief for middle-class
Similarly, other industry leaders in the industry have also shared these sentiments recently, advocating for tax relief for small and middle-class taxpayers, believing it would stimulate consumption and contribute positively for the Indian economy.
Finance Minister Nirmala Sitharaman will present the maiden budget of the Modi 3.0 government in the last week of July. As a routine exercise ahead of every budget, the FM is meeting various stakeholders and seeking inputs from them for various sectors of the economy.
Pai’s remarks came on a tweet saying middle-class taxpayers are not receiving comparable benefits to those being extended to farmers through loan waivers and free electricity provided by political parties.
The user wrote, taxpayers are not getting any privileges…but farmers loans get waived off, free electricity. “I am not comparing apples to oranges here but the govt should fix this disparity and give what ppl deserve if they really want to make a difference now”.
Will Modi govt increase Standard Deduction in Budget 2024?
According to recent reports in the media, there are chances that the Modi government may increase the Standard Deduction limit under the new tax regime to make it more attractive. Under the new tax regime, the government introduced a standard deduction of Rs 50,000 in budget 2023.
In the Union Budget 2023, FM Sitharaman introduced effected some major changes in the new tax regime to attract taxpayers towards the new system. A full tax rebate was also announced on incomes up to Rs 7 lakh, increasing tax exemption limit to Rs 3 lakh under the new tax regime. The new regime also became the default option for taxpayers.
Will basic tax exemption limit go up in Budget 2024?
Reports also suggest that the government may also hike the basic exemption limit under the new tax regime to Rs 5 lakh from the existing Rs 3 lakh.
If the basic exemption limit is hiked to Rs 5 lakh from the current Rs 3 lakh, the tax liability will come down by Rs 10,400 for taxpayers with taxable incomes of approximately Rs 7.6 lakh to Rs 50 lakh. Taxpayers with taxable incomes in the range of Rs 50 lakh to Rs 1 crore will save Rs 11,440.
Those with taxable incomes between Rs 1 crore and up to Rs 2 crore can save Rs 11,960 in lower taxes. Individuals with earnings of above Rs 2 crore can bring their taxable income down by Rs 13,000.
