Income tax expectations for Budget 2024: Focus on medical insurance and capital gains tax

  • December 21, 2023
  • CA Chandan Agarwal's Office

Income tax experts expect equity in deductions within the new tax regime, higher deduction limits for medical insurance premiums, and simplification of the capital gains tax regime in Budget 2024

Finance Minister Nirmala Sitaraman will present the Union Budget 2024 on February 1 next year. It will be an interim Budget as the elections for the Lok Sabha are due early next year. The full Budget for FY25 will be presented after the formation of the new government. This will be the sixth Budget of Finance Minister Nirmala Sitharaman, who presented her first full Budget in July 2019.

Tax experts are anticipating significant changes in Budget 2024,focusing on two crucial areas: increasing deductions for medical insurance premiums and simplifying the capital gains tax regime.

Livemint spoke to income tax experts to understand the expectations with regards to deductions, and taxation under the new and old tax regime.

“There’s a push for equity in deductions within the new tax regime. While NPS scheme investments currently enjoy deductions, there’s a strong expectation for similar benefits for premiums paid toward medical insurance policies or specified medical expenditures,” Said Abhishek Soni, CEO of Tax2win.

Old income tax regime: Expectations from Budget 2024

Archit Gupta, CEO, of Clear shared what he hopes from Budget 2024 concerning the old tax regime

– Increase the deduction limit under Section 80D for medical insurance premiums from 25,000 to 50,000 for individuals

-Increase the deduction limit under Section 80D for medical insurance premiums from 50,000 to 75,000 for senior citizens, reflecting rising healthcare costs.

– Simplification of capital gains tax regime by bringing parity between various asset classes.

New income tax regime: Expectations from Budget 2024

Archit Gupta, CEO, of Clear shared what he hopes from Budget 2024 concerning the new tax regime

– Extend Section 80D deduction for medical insurance premiums under the new regime, ensuring equal access to healthcare tax benefits.

– Reintroduce Section 80CCG with attractive deductions for investments in diversified mutual funds or index funds, incentivizing retail participation in the stock market and promoting long-term wealth creation.

Additional Measures

“Increase the deduction limit for interest repayment on home loans for both residential and commercial properties purchased for primary residence or business purposes, considering the current market conditions and promoting housing affordability,” said Archit Gupta.

Experts foresee the inclusion of these deductions to ensure a fairer and more comprehensive system for taxpayers.

Source: https://www.livemint.com/budget/expectations/income-tax-expectations-for-budget-2024-focus-on-medical-insurance-and-capital-gains-tax-11702872683043.html

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