GR Exclusive: Union Budget 2024 Expectations From Personal Taxation Front

The interim budget for the fiscal year 2024-25 is set to be presented by Union Finance Minister Nirmala Sitharaman on February 1. While we prepare for the Union Budget 2024, individuals' expectations are mostly focused on the tax front.

The personal income tax is one area where some beneficial relief can be anticipated. Since personal income tax collections are now higher than corporate tax collections for the first time, there may be some rationalisation of tax slabs and rates. Under the new tax regime, personal income tax rates and slabs could be somewhat lowered.

Budget Expectations - 2024 from Mananki Parulekar, Co-Founder, Claravest Technologies pvt ltd

In light of the substantial growth witnessed in the Indian real estate industry throughout 2023, strategic updates within the real estate sector outlined in the Union Budget 2024 have the potential to sustain this positive momentum into 2024.

Home Loan Interest Rate Reduction:

• A reduction in home loan interest rates, coupled with more flexible loan tenure options and revised credit provision requirements for property buyers, can stimulate real estate sales. This adjustment accommodates the rising property prices, ensuring affordability for individuals with salaries that may not be commensurate with these increases.

Stamp Duty Concession:

• Implementing a reduction in stamp duty could catalyze higher registration rates for houses and apartments, fostering increased activity within the real estate market.

Tax Rebate Enhancement on Home Loan Interest:

• Considering the surge in housing prices and prevailing high home loan interest rates, revisiting the existing tax rebate cap of Rs. 2 lakh to a higher threshold would provide added impetus for individuals to invest in real estate.

Reduction in Long-Term Capital Gains Tax:

• Exploring the possibility of reducing long-term capital gains tax could amplify interest among homebuyers and investors, thereby contributing to the expansion of the real estate market in India.

Simplified Taxation for REITs and MSM REITs:

• The current intricate taxation framework for Real Estate Investment Trusts (REITs) might be deterring potential investors. Streamlining the taxation process for both REITs and MSM REITs can enhance accessibility and encourage greater investment participation in the Indian real estate sector.

Budget Expectations - 2024 from Mr Pratyush Pandey, CEO , Upflex India

Though the global economy continues to face headwinds posing challenges for the economic outlook with high interest rates, reducing employment and inflation. Multiple war fronts across the world also threaten supply chain efficiency. However, India continues to prove its resilience by emerging as the fastest-growing economy with the expected growth rate of 6.8% to 7.0%.

With this backdrop, the union budget in the coming week is expected to be progressive to help sustain the growth momentum and allocation of resources for the mega infrastructure projects.

The Indian real estate sector which has been exhibiting superior results consecutively, still awaits patiently for the finance minister's announcement. The industry status for real estate and single window clearance for approvals have always featured in the list. The new age segment of coworking spaces is growing impressively. A policy reform of lower GST for small-scale coworking clients can anticipate the participation of more startups in this industry, thereby generating employment.

An increased tax deduction for home loans under section 24 and an upward revision of the standard deduction are anticipated to stimulate the demand for residential real estate across the country. Any additional fund in the hands of the consumer is likely to propel consumption across the segments, thereby adding to the economic expansion.

Union Budget 2024 Expectations from Mr Deepak Gagrani, Founder of MADHUBAN FINVEST

1. Interim Budget Caution: Given that it is an interim budget, we anticipate a tempered approach with fewer large-scale announcements. Major policy shifts may be reserved for the full-fledged budget.

2. Tax Regime Emphasis: We foresee the government's persistence in steering taxpayers towards the new tax regime, possibly through the introduction of additional slabs and incentives. We don't hold high hopes for substantial improvements in personal taxation under the old regime.

3. Sectoral Focus on Tourism and Renewable Energy: We expect a sustained emphasis on domestic tourism and renewable energy. Both sectors are likely to feature prominently, showcasing the government's commitment to sustainable practices and boosting the domestic economy.

4. Infrastructure Development: We expect continued attention on infrastructure development, with potential allocations for projects aimed at enhancing connectivity, transportation, and overall economic growth.

Budget Expectations from Mr Mihir Vora, CIO, TRUST Mutual Fund

Continue fiscal consolidation, Deficit target of 5.3-5.5% against FY24 at 5.9%

FY24 saw muted revenue expenditure growth of about 3% while capital expenditure remained the focus, with 30% growth so far. Revenue expenditure growth for FY25 may continue to remain low.

FY25 may focus on support to rural consumption as it has been a weak spot, Focus on rural may be at some cost to capital expenditure.

Direct tax collection growth may be lower compared to FY 24 which will see over 20% growth.

Indirect tax collections to remain healthy

FY 24 will see Tax/ GDP at the highest levels since 2008. This will continue to improve with increasing compliance

PLI schemes to continue and more sectors are likely to be covered under the scheme.

Defense spending growth may be single-digit, but focus on private sector manufacturing and local manufacturing to continue

Railways capex growth to continue

Divestment targets may be higher for FY25 as stock markets are near all-time high, and there is appetite for public stocks.

For the first time, personal income tax collections are higher than corporate tax collections. We may see some lowering in personal income tax rates and slabs under the new regime.

Budget Expectation from Mr Satish Ramanathan,CIO-Equity, JM Financial Asset Management Ltd

Given the current mood, we do not anticipate any populism in the budget. We do not expect that the Government will go for major announcements in an "interim budget", before the elections. They may signal their intent to continue on the path of pragmatic fiscal management with a continued focus on infra spending and spending on social infrastructure.

One area where we may expect some positive relief is on personal income tax. There may be some rationalisation of tax slabs and rates. A budget which broadly reflects the past trends while laying down the big picture for the way ahead, may be welcomed by the market and be supportive of the economy.

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