Reduce Tax Rates, Increase Deductions, Promote Financial Inclusion: Here're Budget Proposals From Bankbazaar

A report published by online financial products marketplace BankBazaar.com listed recommendations for Union Budget 2024-25 to reduce tax rates, increase deductions, promote financial inclusion and generate digital public infrastructure.

The report highlights the need to enhance DigiLocker integration with income tax and provident fund information. The study reveals that taxpayers face up to 58 per cent tax when inflation is taken into account. As the tax slabs have not been revised to account for inflation, it suggests changing the 30 per cent tax slab to apply to an income of Rs 18 lakh instead of the current Rs 10 lakh limit.

BankBazaar proposes that individuals earning between Rs 9 lakh to Rs 18 lakh should be in the 20 per cent tax bracket.

Also Read: Budget 2024: Key Demands From Digital Payments Space To Boost Financial Inclusion

Key Budget Proposals

Bank Bazaar called for improved integration with DigiLocker to provide seamless access to vital financial documents such as Form 26AS, e-PAN, and EPFO Passbook. This initiative aims to facilitate easier access to essential financial information.

BankBazaar says the current Rs 1.5 lakh deduction under Section 80C was set in 2014 and must be enhanced to at least Rs 2 lakh. Further 80D deductions must be enhanced to Rs 50,000 for general taxpayers and Rs 1 lakh for senior citizens considering the rising costs of insurance premia post-covid.

Further, Bankbazaar said it is crucial to continue initiatives enabling paperless and presence-less credit access. The initiatives like VideoKYC, enhancing fintech innovation and customer convenience should be continued, it said.

Align the taxation of long-term capital gains for unlisted equities with listed ones to bolster investment in the burgeoning finTech industry, the proposal read. It requested the Finance Ministry to invest 25 per cent of the Anusandhan scheme's corpus in finTech innovation to boost digital access to credit. The previous Union Budget had allocated Rs 1 lakh to Anusandhan's scheme through which private entities may opt for an interest-free loan for 50 years.

The proposals also call for sustained support for FinTech and MSME start-ups, proposing tax reliefs and policy frameworks that nurture innovation and investor attractiveness.

Further, it said, "Develop the Generation 2 of digital public infrastructure, including requested enhancements to DigiLocker and Account Aggregator with access for FinTech or LSPs, for seamless financial integration"