Budget 2024: Would the middle class get tax relief?

Tuesday will be Finance minister Nirmala Sitharaman's sixth consecutive budget presentation. To appease his backers, prime minister Narendra Modi's administration is anticipated to continue focusing on lowering the fiscal deficit while simultaneously lowering taxes and raising welfare spending. The respite that nirmala sitharaman will provide in the Union Budget is eagerly awaited by taxpayers. When she makes her first budget presentation under Modi 3.0 on tuesday at 11 a.m. in the Lok Sabha, the information will be made public.

What do taxpayers hope to get out of Budget 2024–2025?

1. Changing income tax rates and slabs to help the middle class.

2. A rise in consumer expenditure and disposable income.

3. rationalizing and streamlining the tax structure on capital gains across different asset types.

4. Simplifying and enhancing adherence.

5. Lowering corporate tax rates, especially for small and medium-sized enterprises.

6. Boosting investment and business activities.

What was said about direct taxes in the Economic Survey?

The Economic survey 2023–24, which was made public on Monday, predicted that gross tax revenue (GTR) would increase by 13.4% in FY24, translating into a tax revenue buoyancy of 1.4. In comparison to FY23, this gain was fueled by a 15.8% increase in direct taxes and a 10.6% increase in indirect taxes. About 55% of the GTR came from direct taxes, with the remaining 45% coming from indirect taxes. The letter from the finance ministry also stated that the government's attempts to improve tax progressivity are in line with this higher contribution from direct taxes.

Furthermore, tax collection efficiency has increased over time, as seen by the decline in the cost of collecting direct taxes from 0.66 percent of total collections in FY20 to 0.51 percent in FY23. Due to robust economic growth and better compliance, both direct and indirect tax receipts grew significantly, surpassing cautious budgetary expectations.