Budget 2023: Tax relief likely for senior citizens, says report

An SBI report said senior citizens can expect some relief in the Union Budget for FY24 that finance minister Nirmala Sitharaman will announce on February 1. 

“Under 80TTB interest income from deposits by senior citizen (Savings bank accounts, fixed deposits, recurring deposit accounts) up to Rs 50,000 is exempted from income tax. This threshold may be increased to Rs 75,000 / Rs 1 lakh which still will have much lower fiscal cost,” the latest Ecowrap report from SBI Research said, reported Moneycontrol on Monday.

The report expects the fiscal deficit for FY24 at 6 per cent of the GDP. This will result in a consolidation of 40 basis points from the current fiscal, the report said.

Meanwhile, a brokerage report said amid moderating tax revenue the scope for a populist budget looks bleak even though it's the last full budget before Lok Sabha elections happen in 2024

On the revenue side, lower tax buoyancy could be partly countered by higher RBI dividend and still-healthy assumption of divestment proceeds, said Emkay Global Financial Services in a report.

"We watch for possible changes to capital gains tax structure and new personal tax regime, extension of concessional 15% tax rate for new manufacturing units, and higher import tariffs on PLI-related products," the report said.

On the revenue front, gross tax/GDP ratio is expected to moderate to 10.9 per cent after a robust tax-buoyant FY23 across segments.

"We will watch for possible changes to the capital gains tax structure to bring uniformity among tax rates/holding periods of various asset classes and some tinkering around the new concessional tax regime and an extension of concessional 15 per cent corporate tax rate for new manufacturing units and marginally higher customs duties on PLI-related products," the report said.