Your Money: Pandemic-hit taxpayers look for tax sops in Budget

4 months ago 50

Now with a prolonged pandemic, taxpayers look guardant to much simplification successful their income taxation liability, successful bid to person much disposable income.

By Shailesh Kumar

The caller twelvemonth not lone brings successful a caller ray of anticipation and excitement but besides raises anticipation amongst taxpayers with regards to the presumption of the Union Budget for the forthcoming fiscal year. Any simplification successful income-tax results successful a nonstop summation successful the disposable income successful the hands of taxpayers. Now with a prolonged pandemic, taxpayers look guardant to much simplification successful their income taxation liability, successful bid to person much disposable income. Some of the income taxation relaxations that taxpayers expect from Budget 2022 are explained here.

Tax complaint slabs
Despite the authorities introducing and expanding taxation rebates, determination has ever been a spread betwixt the expectations of taxpayers and taxation complaint cuts extended by the ministry.  Budget 2020 was the past occasion, erstwhile a alleviation connected income taxation slabs was granted by instauration of an alternate authorities of taxation wherein idiosyncratic taxpayers could avail little rates but astatine the outgo of giving up the payment of assorted taxation deductions and exemptions.

In Budget 2022, taxpayers expect that the authorities whitethorn rejig the income taxation slabs again, to springiness alleviation to taxpayers.  It volition beryllium truly beneficial to taxpayers if the basal exemption bounds for each taxpayers is fixed astatine Rs 5 lakh, portion income up to Rs 10 lakh is taxed astatine nominal income taxation complaint of 5%. Tax rates for taxable income exceeding Rs 10 lakh whitethorn beryllium accordingly rationalised.

Increase successful exemptions
A large conception of idiosyncratic taxpayers belongs to the salaried class. The exemptions provided nether the Income-tax Act, 1961 person not been revisited by the authorities for rather immoderate time.  Considering the contiguous level of inflation, the magnitude of modular deduction presently disposable against wage income should beryllium revised from existing Rs50,000 to minimum Rs 1 lakh.
The caller times of Covid has seen an accrued expenditure by taxpayers towards aesculapian and beingness insurances. Individuals who did not person aesculapian insurances oregon beingness insurances are present resorting to the aforesaid due to the fact that of the uncertainties related to aesculapian expenses and accrued hazard to life. With the accrued aesculapian claims, security companies person accrued their premium charges resulting successful accrued costs successful the hands of taxpayers. It is hoped that the authorities volition revisit the existing thresholds for deduction allowed nether Section 80C and Section 80D respectively, and summation the aforesaid astatine slightest by 50%, commensurate with the accrued outgo of beingness and aesculapian insurance.

Exemption for Covid patients, families
The authorities had provided for exemption of fiscal assistance received from leader oregon kin for gathering Covid-19 expenditures and upon decease of a idiosyncratic suffering from Covid-19. The authorities property merchandise stated that indispensable legislative amendments shall beryllium proposed, nevertheless nary specified amendments person been announced till date. Considering that it is astir Budget clip now, the authorities whitethorn travel up with indispensable changes successful instrumentality successful this regard.

The pandemic has had its interaction connected each walks of beingness and successful the existent times it is improbable the authorities volition instrumentality immoderate decisions without really analysing the interaction of it. It is hoped that the authorities volition strive and tailor-make this Budget much pandemic-centric and empathetic to equilibrium disconnected undue and unforeseen losses and difficulties faced by taxpayers.

The writer is partner, Nangia & Co LLP

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