Budget 2024: Salaried class expects income tax relief, govt employees hopeful of 8th Pay Commission

The full Union Budget for fiscal year 2025 is likely to be presented by Finance Minister Nirmala Sitharaman in the second half of July. Earlier, in February, the Finance Minister presented an Interim Budget ahead of the Lok Sabha elections.

As the new government has taken over, stakeholders across industries and categories are now eagerly anticipating the changes which will be introduced in the full budget for the financial year 2024-25.

Salaried taxpayers comprise a major contributor to the revenue from income tax. The salaried class expects FM Sitharaman to make favourable announcements in the upcoming Budget.

Here’s a look at some of the expectations of the salaried class from the Union Budget 2024:

8th Pay Commission

Many salaried employees, specifically in the government sector, are expecting a revision of their income in accordance with the cost of living today. According to reports, government employees expect the government to announce the 8th Pay Commission.

Notably, the government forms pay commissions every 10 years to review the salaries of its employees. The last pay commission was formed in 2014, and its recommendations were implemented on January 1, 2016.

Read more: 8th Pay Commission proposal sent to government

Lowering Income Tax Rates

There are high expectations of reduction in Income tax rates for individual taxpayers to encourage spending. Presently the income tax rates range from 5% for income above ₹3 lakh annually to 30% for annual income more than ₹15 lakh. Increasing spending can boost economic activity and in turn, add to GST collections. As the Finance Minister kept the income tax rates and slabs unchanged in the Interim Budget, there are high hopes that the government may announce revisions in the Full Budget for FY 2024-25.

Increase in 80C exemption limits

Salaried taxpayers are expecting a revision or adjustment of income tax slabs under the old tax regime or an increase in the tax exemption limit under the new tax regime. The old tax regime currently has a ₹1.5 lakh limit for deductions per annum under Section 80C of the Income Tax Act, 1961. There’s a demand to increase this limit from ₹1.5 lakh to at least ₹2 lakh annually and to include more investment options.

Every year, before the Union Budget, the Finance Minister consults various industry groups. The pre-budget consultations for the current year have begun, and the date for the presentation of the Union Budget 2024 is expected to be announced soon. The salaried class looks forward to the Union Finance Minister with high hopes for tax relief and incentives on investments like government-backed savings schemes.