None
Skip to mainCentral government employees and the salaried class in general look forward to the annual budget exercise because any reliefs/deductions or changes in tax rates have a direct effect on their finances and budget. Some of the practical things that salaried taxpayers want from Budget 2023 are the following:
Deductions under section 80C of the Income-tax Act of 1961 (the "IT Act") include LIC, PPF, employees' contributions to RPF/Superannuation Fund, etc., which are all ways to save or invest money. But the total limit is only Rs. 1,50,000 per year, and it's important to note that it was last changed in the 2014 budget. The overall deduction limit is still low because section 80C covers a wide range of investments that can be deducted. These include 5 year fixed deposits, Equity Linked Savings Scheme (ELSS), Principal repayment on housing loan, life insurance, Sukanya Samriddhi Yojana, provident fund contribution, etc. So, it is likely that the current limit of deductions under section 80C will be raised to Rs. 200,000 per year.
The standard deduction under section 16(ia) of the IT Act, which is Rs. 50,000 per year for a salaried worker, is expected to go up to Rs. 75,000 per year because of inflation and the rising cost of living. The standard deduction limit could also go up once a year, but instead of going up by a fixed amount, the increase could be tied to the rate of inflation.
When figuring out long-term capital gains for Debt Mutual Funds, Unlisted Bonds and Debentures, etc., the minimum holding period is 36 months (or 3 years). So, investors would have to keep these securities for three years before they could be considered long-term capital gains that are taxed under Section 112 of the IT Act. Other capital assets, like listed shares, equity mutual funds, etc., have a 12-month threshold period. On the other hand, unlisted shares and investments in real estate must be held for at least 24 months before they can be considered a long-term capital gain.
So, there needs to be a rationalisation of the holding period for Debt Mutual Funds, Unlisted Bonds and Debentures, etc., and the holding period threshold needs to be lowered from 36 months to 24 months.
Under the "Salary" heading, there are many allowances, such as the Children Education Allowance of Rs. 100 per month per child and the Children Hostel Expense Allowance of Rs. 300 per month per child. These limits aren't in line with what college costs now and need to be changed to account for inflation, since they haven't been raised in more than 20 years. Since the cost of education has gone up a lot, it is expected that the threshold limits will also be changed to make them more realistic and up-to-date.
Section 80CCD(1B) of the IT Act says that salaried employers can claim a deduction for contributions to certain Central Government pension schemes (like the National Pension Scheme and the Atal Pension Scheme) up to an amount of Rs. 50,000 per year, which is more than the Rs. 1,50,000 limit under Section 80C. It is likely that the investment limit under section 80CCD(1B) will be raised from Rs. 50,000 to Rs. 100,000 per year to encourage people to put money into retirement plans.
🕑 24 Apr, 2024 09:17 AM
DoPT forwards 8th Pay Commission demand by IRTSA forwarded to Fin Min
🕑 23 Apr, 2024 10:01 AM
CGDA: Revision of rates of Allowances with DA rates increased to 50%
🕑 22 Apr, 2024 12:59 PM
CBDT: on DoPT order on regularization of Casual Workers
🕑 21 Apr, 2024 09:54 PM
DoPT Consolidated Instructions on SC, ST, OBC, PwD & EWS reservation
🕑 18 Apr, 2024 11:51 AM
Timeline extended for CGHS Beneficiary ID - ABHA ID linking
🕑 18 Apr, 2024 10:22 AM
APAR timelines for Central Civil Services extended to 30th April
🕑 10 Apr, 2024 08:25 AM
DoPT Guidelines on Departmental Promotion Committees
🕑 10 Apr, 2024 08:35 AM
Kendriya Vidyalaya Sangathan Admission Guidelines 2024-2025
🕑 05 Apr, 2024 01:23 PM
Kendriya Vidyalaya Balvatika Admission Schedule - 2024-25
🕑 02 Apr, 2024 09:25 AM
Kendriya Vidyalaya Admissions Open for 2024-25: Key Dates & Appln Process
🕑 01 Apr, 2024 09:23 AM
Kendriya Vidyalaya (KV) schools where Balvatika is functioning
🕑 14 Mar, 2024 02:07 PM
Govt bans 18 vulgar 18 OTT. See the list here
🕑 08 Mar, 2024 01:49 PM
Pension Scheme Gains Traction Across States, Despite Central Hurdles
🕑 20 Feb, 2024 11:17 PM
CGHS rate for general surgery applicable from February 1, 2024
🕑 08 Feb, 2024 10:19 AM
No loan interst change as RBI maintains repo rate at 6.50% for the 6th time