Budget 2024: Will Nirmala Sitharaman bring cheer to middle-class with income tax changes?

Union Budget 2024 may focus on Income Tax relief for low earners to boost economic growth

The Union Budget 2024 could provide Income Tax relief for low earners looms large amid rising prices in the country. Experts believe that a reduction in Income Tax could address economic challenges in the country as Finance Minister Nirmala Sitharaman is set to present the Union Budget for the fiscal year 2024-25 on July 23.

Budget 2024: Union finance minister Nirmala Sitharaman is seen.

Rohan Bhargava, co-founder, CashKaro and EarnKaro, told Hindustan Times, “We are closely watching the discussions around income tax reforms in the upcoming budget. The current tax rate for earnings above ₹15 lakh stands at 30%, which is quite steep. The significant jump in tax rates from ₹3 lakh to ₹15 lakh highlights the need for a more gradual increase. Raising the income threshold before any tax is levied from ₹3 lakh to ₹5 lakh would provide individuals, especially those in the lower earning bracket, with more disposable income. This change would boost consumption, increase savings for the middle class, and provide positive momentum for the e-commerce industry.”

Reports claimed that the Union Budget could prioritise tax cuts for low earners over traditional welfare spending initiatives to enhance disposable incomes and in order to ensure increased consumer spending to stimulate broader economic activity. In the current tax system, Income Tax rates start at 5% for earnings over ₹3 lakh and escalate sharply to 30% for incomes exceeding ₹15 lakh.