India’s salaried class is hoping for some announcements from the Union Finance Minister Nirmala Sitharaman that will provide them with much needed relief. Sitharaman will table the Union Budget 2022-23 in both the houses of the Parliament on February 1. Income taxpayers have a huge list of expectations from the Union Budget 2022-23 as no relief was announced for taxpayers in the last year’s Budget.
“On the individual tax front, most respondents expect an enhancement in the basic income tax exemption limit of Rs 2.5 lakh. Respondents also support an upward revision in the top income slab of Rs 10 lakh and above, and an increase in the existing section 80C deduction limit of Rs 1.5 lakh,” KPMG said in its pre-Budget 2022-23 survey.
According to this survey, 36 per cent respondents expect the government to increase the 80C deduction limit of Rs 1.5 lakh while 29 per cent respondents expect the income tax limit of Rs 10 lakh at which the maximum marginal rate of 30 per cent tax triggers to be enhanced. Nineteen per cent respondents look forward to an increase in standard deduction limit of Rs 50,000 for salaried class.
“Our pre-Budget survey indicates that relied for individual tax payers by way of an enhancement limit of Rs 2.5 lakh is highly awaited. Respondents also support an upward revision in the top income slab of Rs 10 lakhs and an increase in the existing section 80C deduction limit of Rs 1.5 lakh. Although the government has taken several measures to resolve tax disputes and overhaul the tax dispute resolution framework over the past few years, further measures in this regard may help in reducing litigation. A rationalisation of TDS and TCS provisions to ease compliance burdens will also be welcome,” says partner and national head of tax of KPMG in India Rajeev Dimri said.
The Confederation of Indian Industry (CII) has also urged the government to raise the salary cap of Rs 1 lakh per month for eligibility for benefits under the section 80JJAA of the Income Tax Act.
On the other hand, 16 per cent of these respondents also anticipate tax-free allowances and perquisites for salaried individuals keeping in mind work from home arrangement (provision of internet connection/furniture/earphones/etc.).
This is in keeping with what the founder and MD of fintech firm MyMoneyMantra.com raj Khosla expects from the upcoming Budget 2022-23. “Many companies provide laptops, computers and furniture to employees to work from home. Others give a fixed allowance to employees to bear the cost of remote working. The budget should clarify how these costs are to be accounted for by companies as well as provide some relief for such allowances to employees. Such payments should be exempt from tax in the hands of employees if supported by actual bills,” Khosla said.
But why do income taxpayers want an enhanced tax limit? There has been a sharp rise in inflation rates and household expenses from electricity to medical expenses. Consumers and salaried employees are also looking forward to tax-related benefits.
“For consumers and salaried employees, simple tax-related benefits would be welcoming this year. On the business side, reduction in duties, concessions, simplified compliance measures, investment incentives, and state-sponsored programs to boost manufacturing, are all desirable steps to keep up the momentum of growth,” says CEO of BCT Digital Jaya Vaidhyanathan.
Also read: Budget 2022: Liberalised tax regime and more, here’s fintech sector’s wishlist
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