By Neha Malhotra
Indian Union Budget 2021-22: The upcoming spending budget is anticipated to provide short-term tax breaks to salaried-person taxpayers who have suffered salary reductions or job losses since of the Covid-19 pandemic. These could be in the kind of tax rebates created particularly to cater to the impacted taxpayers.
For revenue from trading, business enterprise or profession, revenue tax provisions enable costs such as rent, depreciation, interest, and so forth., as deduction. However, incredibly restricted deductions are obtainable to the salaried class. The upcoming tax measures ought to appear to improve the regular deduction from salary revenue. The regular deduction which permits for a predetermined quantity to be subtracted from an individual’s salary just before taxable revenue is calculated will have to be improved from the present limit of Rs 50,000 to counter larger inflation and retain getting energy of the salaried class.
Remote working
The apprehension that remote working is right here to remain has created employers contemplate what can be paid tax effectively and what alterations need to have to be created to continue to motivate staff. Perks like business vehicles for business enterprise or totally free meals in the erstwhile course of business enterprise, now have no worth for staff working from dwelling. Instead, healthcare insurance coverage, compensation in respect of dwelling-workplace furnishings costs, are now on the top rated of the advantage hierarchy. Therefore, the upcoming Budget will have to include things like a stimulus package centred on dwelling working.
On account of the ‘work from home’ advisory issued by the government, staff had to incur several further expenditure for setting up dwelling workplace. Some of the providers did reimburse their staff for such further expenditure, nevertheless, staff are necessary to spend tax on such reimbursements as properly. The government ought to enable deduction for expenditure incurred by people on setting up dwelling workplace. This deduction could be on the actual quantity of reimbursement topic to some maximum cap, or it could be in the kind of an further regular deduction. Granting deductions would drastically effect employee well-being.
Health insurance coverage
As per the provisions of Section 80D, an person is entitled to claim deduction of healthcare insurance coverage premium paid against insurance coverage taken for self, the spouse, kids and parents. However, this deduction is restricted to Rs 50,000 and Rs 75,000 for people beneath the age of 60 years and senior citizens, respectively. The government is anticipated to acknowledge that healthcare insurance coverage premiums have a tendency to improve beyond a specific age for an person. The government ought to take into account rising the aforementioned applicable limits to at least Rs 75,000-1,00,000 and enable unique rebates on healthcare insurance coverage costs owing to the coronavirus pandemic.
Most people today get a dwelling by taking a housing loan. So, to ramp up the getting energy of salaried people and back the true estate sector, and in turn the economy, the limit for deduction of interest on housing loan beneath Section 24(b) on self-occupied house ought to be withdrawn or be substantially improved from Rs 2 lakh. Besides, the deduction of principal quantity of housing loan repaid be permitted as a deduction furthermore more than and above the limit of Rs 1.5 lakh beneath Section 80C or alternatively, the limit beneath Section 80C be improved from Rs 1.5 lakh.
The writer is director, Nangia Andersen LLP. Inputs from Paridhi Sen