Expectations from last Union Budget of the Modi govt before 2024 polls

In India, salaried workers make up the majority of tax payers, yet they also get the fewest tax breaks. They now have high hopes for the 2023 budget, which will be announced on February 1st. Some experts, though, think that it might not be a populist budget.

We can anticipate that Budget 2023–24, being the last Union Budget of the Modi administration before the 2024 elections, will be taxpayer-friendly and focus on benefits that could be given to a taxpayer. However, the government will make sure to properly link its goal of crafting a budget that stimulates economic growth with thrust on taxpayer expectations, taking into account that the Indian economy has begun to recover from the financial scars of the outbreak of the Covid-19 pandemic.

The following are the main expectations for salaried workers from the Budget 2023, according to experts:

Hike in HRA exemption
In order to accommodate the work-from-home culture and rising rents following COVID, the housing rent allowance was doubled.

New Tax Regime Change
The New Tax Regime can be altered to increase its appeal to salaried taxpayers, given there aren't currently many of them opting for it.

An increase in the Section 80C Cap
Given the rising rate of inflation and in order to stimulate individual savings and investments, an increase in the section 80C deduction ceiling, which is presently set at Rs. 150,000, is anticipated, according to Mangal. This restriction was last raised roughly ten years ago.

Since the Financial Year 2014–15 of Rs.1,50,000, the deduction based on tax-saving investments u/s 80C of the Income Tax Act,1961 has not increased. It is anticipated that the same will be set at Rs. 2,50,000 each. It will assist the salaried class in promoting investments while simultaneously lowering their tax liabilities and enabling them to pay the lowest tax rate.

Tax breaks for the salaried class
Salaried employees should anticipate incentives in the Budget 2023 since they received no big advantages in the budget for the previous year. The standard deduction of Rs. 50,000 can be increased to a realistic cap of up to Rs. 80,000, according to experts, as it will benefit middle-class employees by lowering their tax obligations.

Work from Home Perks
Following the Covid-19 outbreak, many businesses adopted a "Work From Home" framework. Unlike conventional work schedules, this strategy has drawbacks and a big effect on workers.

Several expenses, such energy and internet costs, which were previously covered by the business, must now be paid out of the employee's pocket. In light of this, even if the company frequently gives employees allowances in this regard, the same is taxable in the employee's hands under the heading "Salaries." To streamline and give the salaried class a tax benefit, this budget is anticipated to include a "Work from Home allowance".

Increase in the Basic Exemption Limit
According to experts, the basic exemption level of Rs. 2,50,000 for residents under the age of 60 should be increased. This will provide relief and lessen the tax burden on the salaried class in lower pay scales.