KPMG's Hopes for Budget 2024-25: Tax Reforms and Reliefs

Consultancy firm KPMG anticipates key tax reforms in India's upcoming Budget 2024-25, including doubling the standard deduction, increasing the tax break on home loan interest, and rationalizing the capital gains tax structure. These recommendations aim to boost disposable income, support real estate, and simplify financial regulations.

KPMG, a leading consultancy firm, outlines its expectations for India's Budget 2024-25, which is set to be unveiled on July 23 in Parliament. Among the key recommendations are doubling the standard deduction to Rs 1 lakh, increasing the tax exemption limit, and revising capital gains tax regulations.

The firm highlights the rising costs of medical expenses, fuel, and overall inflation as critical factors necessitating these changes. By enhancing the standard deduction, the goal is to provide more net disposable income for consumers, either to spend on goods or save. Additionally, there is a call for increasing the basic tax exemption limit under the new regime from Rs 3 lakh to Rs 5 lakh.

Regarding housing loans, KPMG points out the pressures on the real estate sector due to recent interest rate hikes and regulatory reforms. The firm suggests reconsidering deductions for interest on self-occupied housing loans or enhancing deductions in the old tax regime to at least Rs 3 lakh. Uniformity in the capital gains tax structure and continued alignment of Customs tariff rates with industrial policy are also emphasized as essential measures.

(With inputs from agencies.)