The Union Budget 2022-23 is likely to be tabled on February 1, 2022 by Union Finance Minister Nirmala Sitharaman. Expectations among the country's taxpayers remain high, despite the government's failure to disclose any big tax benefits in the previous budgets. Many industry groups have already appealed to the government to provide some relief to taxpayers in light of the growing demand for changes in income tax.
As taxpayers wait for some announcements in the upcoming budget, it has been revealed that the government is discussing raising the standard deduction ceiling from the current Rs 50,000.
According to a report in the Economic Times, the standard deduction ceiling for salaried taxpayers and pensioners may be hiked by 30-35 per cent in the 2019 budget. The income tax brackets, on the other hand, are expected to remain unaltered.
According to a top source from the finance ministry, the government has received numerous recommendations regarding personal taxation. Given the increased cost of medical bills as a result of the Covid-19 outbreak, the most prevalent request was to increase the standard deduction limit.
The idea, according to the official, would raise the standard deduction limit by 30-35 per cent. However, it should be noted that the idea has not yet received approval. The current tax collection crisis is likely to have a significant impact on the proposal's fate.
Another expectation is in the rebate on housing loan interest. There is a growing demand from the individual taxpayers as well as market experts to increase the tax deduction on home loan interest rates from Rs 2 lakh to at least Rs 5 lakh under Section 24 of the Income Tax Act. This might spark a surge in housing demand, particularly in the inexpensive and mid-segment segments. Increased to Rs 5 lakhs, the amount will attract more salaried people into the category, allowing them to achieve their ambition of owning a property.
There are also calls for deductions for home loan principal repayment in addition to the existing 80C deduction. Personal tax relief, whether in the form of lower rates or altered tax slabs, would be welcome, especially given the last rise in the Section 80C deduction limit (to Rs 1.5 lakh per year) that occurred in 2014.
The government should seriously consider revising the city-wise pricing parameters to include a broader customer base under the benefits of extended to this segment.