Union Budget 2021-22 Expectations for Taxpayers: The Covid-19 pandemic and the resultant lockdowns not only dealt a deadly blow to the worldwide economy and a majority of industries, but also hit the popular man and taxpayers challenging. While millions of persons lost their jobs, a majority of personnel had to take spend cuts, which is nevertheless continuing in numerous situations. It is, for that reason, required to place more revenue in the hands of such persons who are facing economic complications for a extended time.
With the Budget 2021 becoming presented today, all eyes are now set on Finance Minister Nirmala Sitharaman. Here’s what taxpayers anticipate from the Budget this time.
1. Revision in tax slabs
In the present pandemic situation wherein people are facing economic influence, it is required to place more revenue in the hands of the popular man for revival of the economy. Hence, “it is recommended to lower the highest tax rate from 30% to 25% and also increase the threshold from Rs 10 lakh to Rs 20 lakh for individuals not opting for the special regime,” says Divya Baweja, Partner, Deloitte India.
2. Work from property deduction
The present pandemic has resulted in advertising a culture of ‘Work from Home’ which will be encouraged by employers in occasions to come as it reduces transportation price, travelling time and improves work life balance. As personnel would be incurring more expenditure such as net charges, rent, electrical energy, furnishings and so on to produce a property workplace, it is encouraged that an more typical deduction of Rs 50,000 should really be introduced for expenditure incurred though working from property.
3. Simplified tax regime
While the introduction of the ‘simplified tax regime’ in the Finance Act 2020 has supplied some relief to taxpayers, it is encouraged that loss from property house be permitted as a deduction in the simplified regime as effectively, topic to the current limit of Rs 2 lakh. This would raise the disposable revenue in the hands of person taxpayers and motivate them to get covered below this regime.
4. Increase in Section 80C limit
The deduction below Section 80C has remained unchanged because the Finance Act, 2014. The section is meant to provide relief to people for specified investments and expenditure, though at the similar time channelise investments into places that assistance the economy. However, “over the years, the scope of this deduction has become too wide as compared to its very modest limits. As such, the exemption limit under Section 80C can be enhanced from Rs 150,000 to Rs 250,000, which would provide tax savings in the range of Rs 20,000 to Rs 30,000, depending upon the income level,” says Baweja.
Alternatively, a separate deduction could be supplied for expenditures such as children’s tuition charges, provident fund contributions, life insurance coverage premium and housing loan principal payments as compared to the investment-oriented things in that scope.
5. Increase deduction limit for well being insurance coverage
Healthcare charges continue to rise and therefore persons need to have a greater well being insurance coverage cover. This has turn into even more essential in light of the pandemic with raise in hospitalisation charges. “The government may consider increasing the investment limit in respect of payment towards health insurance premium under Section 80D from Rs 25,000 to at least Rs 50,000 for self and family, and for senior citizens, dependent parents, from Rs 50,000 to at least Rs 75,000,” says Baweja.