Budget 2024: House Rent Allowance Should Be Extended To New Tax Regime

House Rent Allowance (HRA) deductions should be allowed under the New Tax Regime, expects the common man.

New Delhi: With just a few days to go for the Union Budget 2024, the common man's wishlist centres around FM Nirmala Sitharaman's announcement for a more equitable and efficient tax regime.  The Budget will be presented before the Lok Sabha on July 23.

Raghunathan Parthasarathy, Partner, Corporate Tax, Tax & Regulatory Services, BDO India listed out 4 major points on the personal taxation front, that is the most anticipated Wishlist of the salaried individuals and common man.

He highlights that the expectations of public at large are: 

1. (a) raising the section 80C limit from INR 1.5 lakhs to INR 3 lakhs, (b) increasing the section 80D limit to INR 50,000 (excluding deductions for parents) due to rising health insurance costs, and (c) doubling the standard deduction on salary income from INR 50,000 to better reflect the cost of living.

2 Individuals and HUFs having a business income shall have the option to select between the new and old tax regimes annually.

3 House Rent Allowance to be extended to the new tax regime. Additionally, deduction for interest payable during the construction period may be allowed in the year of payment itself.  The Cap of HRA exemption to be increased by reducing the reduction to 5% of basic salary from the current 10%.

4 House property [Section 23(1)(c)] – Clarification on whether benefit of vacancy allowance be availed in case of a house property which was let during one of the previous years in the past but remained vacant for the whole of the relevant previous year, although it was in a lettable position.