Finance Minister Nirmala Sitharaman is set to present the Union Budget 2024 in late July, marking her seventh budgetary address. Given that Sitharaman had already announced the interim budget in February, there is increasing concern over whether or not the FM will slash income tax rates.
The full-fledged Budget for FY25 follows formation of the new government. Sitharaman, known for her focus on structural changes, will aim to address necessary expenditures in this interim budget.
Given the recent trend of skewed consumption in India in recent years, clamour is growing among citizens and India Inc alike, for an income tax rate cut which would allow for more money in hand that can give the falling consumption a fillip.
Industry lobby groups including FICCI and CII have called for a cut in individual tax rates and rationalisation in GST rates. Reports suggest that in the preliminary stages of discussion, the ministry was considering the prospect of cutting tax rates.
Prime Minister Narendra Modi’s administration is contemplating measures to boost consumption in India’s forthcoming budget, potentially exceeding Rs 50,000 crore, reports said. The Ministry of Finance is discussing plans to cut taxes, targeting individuals with higher spending propensity, particularly those earning between Rs 5,00,000 and Rs 15 lakh, as per news agency Bloomberg.
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Currently taxed between 5% to 20%, these earners might benefit from the proposed tax reductions, with the possibility of introducing a new tax bracket also under consideration.
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Bottom line. So far, the average tax refund in 2024 is outpacing 2023. If you're among the millions of Americans getting something back from the IRS, make the most of it — either by paying down debt, depositing it in an interest-earning account or financing a major purchase. Subscribe to the CNBC Select Newsletter!
What are the new tax changes for 2024? ›
Standard Deduction Changes for 2024
For tax year 2024, the standard deduction for married couples filing jointly rises to $29,200, an increase of $1,500 from 2023. For single taxpayers, the standard deduction rose to $14,600, a $750 increase from the previous year.
What is the budget for the IRS in 2024? ›
The FY 2024 base begins at the FY 2023 Enacted level of $12.3 billion. In addition to $537 million to maintain current staffing levels, the IRS requires another $281 million to reach current operating levels. The additional base adjustment entails supplementary labor costs within Taxpayer Services and Enforcement.
What does "cut taxes" mean? ›
Tax cuts are changes to the tax code that reduce the amount of tax you have to pay. A common way of cutting taxes is to reduce the income tax rate—the percentage of taxable income that an individual or business pays in taxes.
At what age is social security no longer taxed? ›
At what age is Social Security no longer taxable? Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.
What is the standard deduction for seniors over 65 in 2024? ›
Note: If you are at least 65 or blind, you can claim an additional 2024 standard deduction of $1,950 (also $1,950 if using the single or head of household filing status). If you're both 65 and blind, the additional deduction amount is doubled.
What happens to taxes in 2026? ›
At the end of 2025, the individual tax. provisions in the Tax Cuts and Jobs Act (TCJA) expire all at once. Without congressional action, most taxpayers will see a notable tax increase relative to current policy in 2026. In 2026, business taxes will also be higher as 100 percent bonus depreciation.
Why are people owing taxes in 2024? ›
As the 2024 tax deadline approaches, you may be in the position of expecting to owe money to the IRS. This may be the case if you made over $20,000 from a side hustle in 2023, you earn self-employment income (such as through a freelance gig), or you entered a new tax bracket.
How to get a $10,000 tax refund in 2024? ›
How do I get a 10,000 tax refund? You could end up with a $10,000 tax refund if you've paid significantly more tax payments than you owe at the end of the year.
How much of Social Security is taxable? ›
Substantial income includes wages, earnings from self-employment, interest, dividends, and other taxable income that must be reported on your tax return. Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. More than $34,000, up to 85% of your benefits may be taxable.
The earned income tax credit is a refundable credit for low- to middle-income workers. For the 2024 tax year, the tax credit ranges from a max of $632 to $7,830, depending on tax filing status, income and number of children. Taxpayers without children can qualify for a lower credit amount.
How to minimize taxable income? ›
8 ways to potentially lower your taxes
- Plan throughout the year for taxes.
- Contribute to your retirement accounts.
- Contribute to your HSA.
- If you're older than 70.5 years, consider a QCD.
- If you're itemizing, maximize deductions.
- Look for opportunities to leverage available tax credits.
- Consider tax-loss harvesting.
Public services would be cut, other taxes and levies that fall more heavily on low- and middle-income families (including sales taxes, excise taxes, fees and fines) would be increased, or — most likely — both those things would happen.
Who pays the most income taxes in the US? ›
Most of the government's federal income tax revenue comes from the nation's top income earners. In 2021, the top 5% of earners — people with incomes $252,840 and above — collectively paid over $1.4 trillion in income taxes, or about 66% of the national total.
What would happen if we abolished the IRS? ›
"Annual tax returns and W-2s would cease to exist. People who make their money on the black market would be taxed at the same rate as anyone else. The enormous compliance costs currently associated with filing one's annual taxes would be cut significantly.
Why are tax refunds smaller this year? ›
Changes to your income last year may play a role in receiving a smaller refund this tax season. Here are some examples: Salary increase: If you got a salary increase last year but neglected to increase your tax withholding, this could lead to a smaller tax refund when you file.
How much is the child tax credit for 2024? ›
The suggested increments are $1,800 for the 2023 tax year, $1,900 for the 2024 tax year, and $2,000 for the 2025 tax year.
What will tax brackets revert to in 2026? ›
Under the TCJA, the tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. On January 1, 2026, the rates return to their pre-TCJA amounts of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The income brackets to which those rates are to apply will also be different and are adjusted for inflation each year.
