Union Budget: Assessing impact of anticipated personal finance adjustments

As the dawn of the new year unfolds, individuals nationwide embark on setting their personal and financial resolutions. A pivotal event that significantly influences these resolutions is the Union Budget, with profound implications for matters related to personal finance and taxation. Significance of interim budget amid election constraints The forthcoming budget, scheduled before the 2024 general elections, holds particular significance. However, given the constraints imposed by the election commission, it is expected to be an interim budget devoid of any groundbreaking announcements. Addressing queries at the CII’s Global Economic Forum 2023, Finance Minister Nirmala Sitharaman emphasized that the upcoming budget will primarily serve as a vote-on-account due to the impending elections. No substantial announcements are expected, as real changes are anticipated post the general election. The budget’s focus will be on meeting the current government’s expenditure until the new government assumes office. Possible adjustments in taxation Despite the limited scope for major announcements, expectations linger on potential changes in tax slabs and rates. The finance minister’s introduction of the simplified tax regime in the Union Budget 2020 and subsequent adjustments in the Budget 2023, set the stage for further modifications. Possibilities include a reduction in the highest tax rate and an increase in the threshold limit, making the new tax regime more appealing to taxpayers. With major changes off the table, the budget may witness rationalisation efforts. One potential area of focus is the categorisation of burgeoning business hubs like Bengaluru, Hyderabad, Pune and Gurugram as metro cities for House Rent Allowance (HRA) calculations. This adjustment aims to align these technology hubs with the rental dynamics of traditional metro cities, offering higher HRA exemptions to salaried individuals. Enhancing tax transactions for non-residents Expectations extend to facilitating tax payments directly from overseas bank accounts for non-residents. This proposed change aims to eliminate the current restriction, negating the necessity for Indian bank accounts for tax transactions. Additionally, the extension of e-verification processes to foreign mobile numbers is envisioned to streamline tax return filing for non-residents, minimising paperwork and delays. As the Union Budget looms on the horizon, stakeholders keenly await expected changes. The populace anticipates measures to alleviate the burden on taxpayers, foster a more favourable environment for saving and investing and address concerns about inflation. Simplifying tax procedures and promoting sustainability emerge as top priorities that citizens hope the budget will prioritise. Nitin Baijal is Executive Director, Deloitte Haskins and Sells LLP; Sahil Bhasin is Senior Manager, Deloitte Haskins and Sells LLP, and Kajal Gupta is Deputy Manager, Deloitte Haskins and Sells LLP. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.