Since no tax relief was announced in the previous year’s Budget, income earners have a long list of expectations for the Union Budget 2022-23.
The salaried class in India is hopeful that Union Finance Minister Nirmala Sitharaman will make some announcements that will offer them much-needed relief. On February 1, Sitharaman will present the Union Budget 2022-23 to both houses of Parliament. Because no tax relief was announced in the previous year’s Budget, income earners have a long list of expectations for the Union Budget 2022-23.
“On the individual tax front, most respondents anticipate an increase in the Rs 2.5 lakh basic income tax exemption ceiling. “Respondents also favor an increase in the present section 80C deduction ceiling of Rs 1.5 lakh, as well as an upward revision in the top income slab of Rs 10 lakh and above,” KPMG stated in its pre-Budget 2022-23 poll.
According to the poll, 36% of respondents anticipate the government to raise the Rs 1.5 lakh 80C deduction limit, while 29% expect the income tax ceiling of Rs 10 lakh, at which the maximum marginal rate of 30% tax activates, to be increased. Nineteen percent of respondents want the standard deduction limit for paid workers to be increased to Rs 50,000.
“According to our pre-Budget survey, an augmentation ceiling of Rs 2.5 lakh for individual taxpayers is eagerly anticipated.” Respondents also favour an increase in the present section 80C deduction ceiling of Rs 1.5 lakh and an upward revision of the top income slab of Rs 10 lakhs. Although the government has taken significant steps in recent years to resolve tax disputes and restructure the tax dispute resolution framework, more steps in this direction could assist reduce litigation. TDS and TCS rules should be streamlined to save compliance costs, argues Rajeev Dimri, partner and national head of tax at KPMG in India.
The Confederation of Indian Industry (CII) has also requested the government to increase the Rs 1 lakh monthly salary threshold for tax benefits under section 80JJAA of the Income Tax Act.
On the other hand, 16% of these respondents expect tax-free allowances and benefits for salaried workers, based on work-from-home arrangements (supply of internet connection/furniture/earphones/etc.).
This aligns with what Raj Khosla, the founder and CEO of fintech business MyMoneyMantra.com, predicts for the next Budget 2022-23. “Many businesses offer employees with laptops, PCs, and furnishings so they may work from home. Others pay employees a certain amount to cover the costs of working from home. The budget should spell out how corporations should account for these costs and provide some relief for employees who receive such benefits. Such payments should be tax-free in the hands of employees if they are accompanied by actual bills, according to Khosla.
But why do high-income households prefer a higher tax threshold? Inflation rates have risen dramatically, as have household bills ranging from electricity to medical care. Consumers and salaried workers are both affected.
“Simple tax-related perks would be welcome this year for consumers and paid employees.” On the business side, reductions in duties, concessions, simpler compliance processes, investment incentives, and state-sponsored manufacturing programs are all desired ways to maintain the pace of expansion,” says Jaya Vaidhyanathan, CEO of BCT Digital.