Budget 2024: Standard deduction should be raised to ₹65,000, says Deepashree Shetty
Budget 2024: Standard deduction should be raised to ₹65,000, says Deepashree Shetty
In an email interview with MintGenie, she also talks about the need to provide allowance for expenses related to electric vehicles.
As electric vehicles have become quite popular lately, and are set to be more popular in the near future, do you expect the government to grant deduction for expenses incurred in re-charging of vehicles?
Currently, the fuel allowance received by an employee is subject to tax exemption under the I-T Act, with a maximum limit of ₹2,400 per month. However, there is no such allowance for expenses relating to electric vehicles (EV). The introduction of an exemption or deduction for allowances related to recharging EVs would not only provide tax benefits to the employees but also further promote the EV market.
There have been demands among the NRI community regarding allowing foreign mobile numbers to receive OTP for the purpose of verification while filing their tax returns. What are your views on this?
For non-resident individuals living outside India who file tax returns, the e-verification process (post-filing of tax returns) can currently be completed only through the net banking channel or digital signature, which might not be available to all individuals.
Verification through OTPs becomes difficult as they are sent only to Indian numbers. If OTPs are sent to foreign mobile numbers, it could streamline the process, reduce paperwork and administrative tasks such as tracking receipt by the tax office and applying for condonation of delays. This could enhance the tax-filing experience for such diligent tax filers.
What other changes can be introduced to make the tax-filing process easier for the Indian citizens who are currently residing in foreign countries?
The taxpayers’ positive response towards payment of tax through the newly introduced UPI gateway shows that ease in tax payment can encourage taxpayers.
Similarly, for taxpayers based overseas, payment gateways through selective foreign bank accounts and receipt of refunds in such original modes of payment can simplify the process and avoid any delays or interest charges.
Do you think that there should be an increase in standard deduction from the current figure of ₹50,000? What can be the new limit that could give a sense of relief to salaried taxpayers?
The standard deduction of ₹50,000 was introduced in lieu of the exemption of transport allowance and reimbursement of miscellaneous medical expenses. The same has now been allowed under the new tax regime.
Considering inflation, we can expect a raise in the amount of the standard deduction to at least ₹65,000 which could benefit salaried individuals in the higher tax slabs.
Should salaried taxpayers cut down on their investment in tax-saving instruments (e.g. 80C) if they plan to opt for the new tax regime in the following years?
Most of the deductions under Section 80C cover basic expenditures of an individual such as life-insurance premium payments, tuition fees, provident fund contributions, etc. When opting for the New Tax Regime (NTR), salaried taxpayers should plan their investments to provide maximum tax benefits.
The tax slab rates and basic thresholds under NTR are adjusted to compensate for the Section 80C limit of ₹150,000. Considering the non-availability of certain deductions under NTR, investment in the National Pension Scheme (NPS) or Atal Pension Yojana could be seen as a preferred option for availing tax deductions up to ₹200,000 or ₹150,000 respectively.
Source:- Livemint