Union Budget 2021-22 Expectations for Salaried People: Salary class staff are the most impacted through the Covid-19 pandemic and continuing to be the most impacted ones. In the tax economy salary class staff are the maximum contributors in the terms of a number of taxpayers. Also, they are the actual backbone of the economy. As it is normally mentioned “one happy employee delivers million output with a smiling face” – it is correct to the core. The salaried class is hoping for massive positive surprises from the upcoming Union Budget.
To provide more relief to the taxpayer to recover from the scenario of the Covid-19 pandemic, current finance minister Nirmala Sitharaman must reform the direct tax law in such a manner so that it delivers maximum incentives, subsidies, tax cuts and other added benefits to the typical particular person.
In case of the present tax regime threshold, tax exemption limit must be enhanced from Rs 2.5 to Rs 5 lakh for the standard person, Rs 3 lakh to Rs 6 lakh for senior citizens and Rs 5 lakh to Rs 8 lakh for super senior citizens, and the tax price must be 10% for revenue up to Rs 10 lakh, 20% for revenue more than Rs 10 lakh but up to Rs 20 lakh, and 30% for revenue more than Rs 20 lakh.
Apart from the threshold limit, the following must also be taken into consideration:
• To enhance the sentiment, the threshold limit of the common deduction from salary must be enhanced from the current Rs 50000 to Rs 100000.
• Threshold limit of the common deduction from household pension must be enhanced from the current Rs 15000 to Rs 25000.
• The government is pushing banks difficult to boost secondary and customer lending, and escalating the threshold limit of deduction of interest on house loans from the current Rs 200000 to Rs 500000 will serve each purposes.
• Threshold exemption limit of children’s education or hostel allowance must be enhanced from the current Rs one hundred / Rs 300 to Rs 1000 / Rs 3000 per month, respectively.
• Threshold exemption limit on retrenchment compensation or quantity received below voluntary retirement scheme by an employee must be enhanced from current Rs. 500000 to Rs. 1500000.
• Threshold exemption limit on the worth of any present on ceremonial occasions or otherwise must be enhanced from current Rs. 5000 to Rs. 25000. This will support in the circulation of money flow in each a direct and indirect manner.
• Threshold limit for deduction below section 80C, 80CCC & 80 CCD must be enhanced from current Rs. 150000 to Rs. 200000 to market investment.
• Due to COVID-19 costs on account overall health verify-up (i.e. expenditure on account of healthcare tests) are escalating day by day, taking into account this consideration limit of preventive overall health verify-up below section 80D must be enhanced from current Rs. 5000 to Rs. 20000.
• Some deduction/exemption must be provided for work from house expenditure also as the salaried class particular person will have to incur further expenditure on account of working from house such as phone costs, web costs and so on.
• Due to the COVID-19 pandemic demand for actual estate and as nicely as rental revenue is decreased. House home owners possessing rental revenue are incurring larger upkeep charges, but the common deduction is only 30%. So, to provide help to the property home owners in this tough scenario this common deduction of 30% must be enhanced.
• Rate of extended-term capital obtain tax which is at present at 20% must also be decreased to 10%.
• Scope of deduction of healthcare costs below section 80D must be enhanced to non-senior citizens also which is presently provided to senior citizens only.
• Threshold limit of Section 80D must also be enhanced as people today are paying the premium on the larger side due to an boost in hospitalization costs day by day, but the corresponding deduction quantity is not escalating as such.
• Deduction for investment must also be permitted in case of “New Tax Regime” otherwise there will be no advantage to introducing “New Tax Regime” in case of assesses possessing a lesser revenue.
• Applicability of MAT on folks must be removed as it is causing hardship.
• In the case of capital obtain – Capital obtain exemption must also be permitted in the circumstances exactly where the asset is bought in the scenario exactly where clubbing provisions are applicable.
• Scope of ailments below section 80DDB must be enhanced to cover more ailments such as COVID-19.
• The situation to avail deduction of interest on the loan for property home below section 80EEA must be relaxed so that maximum folks can take the advantage of this deduction. One such situation is that the stamp duty worth of property home does not exceed Rs 45 lakh. This limit of Rs 45 lakh must be enhanced.
In the summary, there must be a budgeted advantage in terms of taxation and the availability of effortless finance to employee class people today.
(By Kapil Rana, Founder & Chairman, HostBooks Ltd)