Budget should raise basic exemption to Rs 3.5 lakh

New Delhi: The government should double standard deduction under the new concessional tax regime to Rs 1 lakh or increase the basic exemption limit to Rs 3.5 lakh in the upcoming Budget, tax and consultancy firm EY said. Listing out the priorities on taxation reforms in the upcoming Budget, EY said the government should prioritise streamlining tax structures, enhancing policy frameworks to promote economic growth, and fostering a conducive environment for investment and development.

EY also suggested that stability in corporate tax rates be maintained, TDS provision rationalised as well as streamlining dispute resolution as possible areas for consideration in the Budget to be tabled in Parliament next month.

On the personal tax front, the concessional tax regime without exemptions/ deductions should continue, it said. To make it more attractive, the standard deduction under concessional tax regime may be increased to Rs 1 lakh instead of existing deduction of Rs 50,000 or the basic exemption limit may be increased from Rs 3 lakh to Rs 3.5 lakh, EY said, listing out the policy priorities before the new government.