Union Budget 2021-22 Expectations of the Common Man: For the year that has now come to be recognized for the surprises and lessons it unleashed, the frequent man would undoubtedly appear up to the Modi government and FM Nirmala Sitharaman for incentives, subsidies, tax cuts and other advantages to grapple with the woes of the Covid-19 pandemic. Further, the gap in affordability strengthens the expectations of a frequent man from the government.
Here are some of the important expectations of the frequent man from the Budget 2021.
1. Enhanced limits to catch up growing health-related expenses
There is an growing trend of wellness consciousness, be it mindful consuming, wellness verify-ups, and preventive remedies, which is eminent in the ongoing pandemic scenario and the aftereffects it carries. An enhanced deduction from the present limit of Rs 5,000 for wellness verify-up, deductions for expenditure on health-related tests and remedy is therefore a valid and genuine ask of the frequent man.
2. Relaxation in residential status norms
The scope of revenue taxable in India is primarily based on the residential status which is determined primarily based on the quantity of days of remain in India. “Due to restrictions on international air travel, an individual may have been stranded in India and it would be unfair if that stay is also considered to determine their residential status for financial 2020-21, or even beyond if such travel restrictions continue. While a circular was issued to ignore such days in determining residential status for financial 2019-20, a clarification is awaited for 2020-21. As this wasn’t foreseen before, the legislation may be amended to ignore those days of stay in India on account of travel restrictions,” says Tapati Ghose, Partner, Deloitte India.
3. Withdrawal or pre-closure of deposits and bonds
Withdrawals from provident fund attracts tax liability in the absence of continuous service period of 5 years. One can not deny a larger attrition for the duration of this year. Hence, the situation of 5 years may well be relaxed in situations of job loss for the duration of the pandemic.
4. Weighted deduction of expenditure
To increase consumption, a money voucher scheme was introduced in lieu of leave travel concession (in view of the disruptions in travel and hospitality sectors). “However, the deduction is considered if the employee spends three times the prescribed amount. The government may consider providing a deduction for two times the expenditure incurred for specific purposes to make the scheme more attractive to individuals,” says Ghose.
5. Standard deduction for work from household
Work-from-household is the new normal these days and the salaried class will have to incur extra expenditure to meet communication and infrastructure specifications. Introduction of normal deduction for such expenditure would be a welcome relief.
6. Enhanced deduction for revenue from home home
On account of the pandemic, there is diminished demand for actual estate and reduction in rent revenue. Further, a home owner with home home revenue would also be incurring larger upkeep, in excess of the 30% normal deduction permitted. In order to help the home owners in these hard instances, the normal deduction may well be elevated appropriately at least for the subsequent two years.
7. Rate cuts
The Budget 2020 introduced a simplified tax regime with decreased slab prices, but came with circumstances. “Individuals would have to forego exemptions and deductions to enjoy this benefit. In order to extend the benefit of lower tax rates to a larger section of individuals, to improve the cash flow issues, the government may consider allowing some of the exemptions and deductions under the new tax regime,” informs Ghose.
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It may well be noted that regardless of the quite a few reliefs that have been offered for the duration of the year on account of the pandemic, most of these do not straight advantage the frequent man. The frequent man is therefore searching forward to this year’s Budget to increase money flows and allow more consumption and savings for greater sentiment.