Union Budget 2023: What does the common man want from Nirmala Sitharaman?

General:

• Increase in the basic exemption limit from Rs 2,50,000 which has remained unchanged since the Modi government came to power in 2014-15. The increase to INR 300,000 will definitely help in absorbing some part of inflation and putting more money in people’s pockets.
• The deduction limit on certain eligible investments and expenditure under section 80C of the Income Tax Act, 1961 (‘Act’) is currently capped at INR 150,000. Last time this limit was increased in the year 2014-15, before which it was Rs 100,000. The government may consider increasing it to Rs 250,000 which will encourage people to invest more and help boost economic growth.
• The New Personal Tax Regime (“NPTR”) implemented from April 1, 2020 has not gained much popularity, and needs a facelift. The government may also consider allowing certain specified deductions like deduction under section 80C etc. under this arrangement. Currently, NPTR is not considered favorable where taxable income exceeds INR 15 lakhs. The government may consider reforming the slabs to make it more beneficial for individuals.
• Deduction for interest paid on housing loan for self-occupied property is currently capped at INR 2,00,000, provided the acquisition/construction is completed within 5 years. Given that several housing projects are getting delayed due to the Covid pandemic, such completion period may be extended up to 7 years to provide relief to home buyers and give a positive signal to the real estate world. The present capping of deduction in respect of interest on loan may also be raised to INR 300,000 lakhs keeping in view the increase in interest rates.

Salaried Category:

• Given that salaried employees mainly bear the personal tax revenue of India as they pay a comparatively higher percentage of taxes which are deducted at source, they should also be eligible for more reliefs such as: Old tax The standard deduction allowed under the regime is currently INR 50,000. The cut was introduced to absorb medical and transport allowances, both of which have risen sharply due to the pandemic and higher fuel costs due to global unrest. To take care of these twin effects, the government may consider increasing the deduction to Rs 75,000.
• The salaried class gets some allowances such as children’s education allowance, hostel expense allowance, etc., which is Rs 100 per month per child and Rs 300 per month per child, respectively, up to 2 children. These limits haven’t been updated for decades and are very low compared to actual costs. Such limit of allowance may be rationalized to some extent to bring it in line with the current costs and for children’s education allowance Rs. 3,000 per month and for hostel expenditure allowance Rs. 6,000 per month which can be extended up to Rs.
• The pandemic has prompted many employers to adopt a work from home culture. This has increased the costs like electricity, internet, mobile expenses etc. for the employees. A tax-free allowance of up to Rs 6,000 per month may be introduced in respect of working from home to cover such additional costs.
• The Leave Travel Allowance presently sanctioned for a block of four calendar years may be extended for each year and is allowed to cover travel expenses abroad in addition to the travel within India currently eligible. This will provide extended benefits to the taxpayers as they can claim it repeatedly and avail the benefits irrespective of the time and destination of travel during their leave.

female:

• Women taxpayers were exempted from additional tax slabs till the tax year 2011-12. The government may consider increasing the basic exemption limit to Rs 50,000 for them.
• At present, interest in respect of higher education loan is eligible to be claimed as deduction under section 80E of the Act over a period of 8 years. To encourage higher education of girls, the government may consider increasing the limit of 8 years to at least 12 years.
• It is also expected to provide tax relief of at least Rs 6,000 per month to cover crèche facility expenses, in view of the growing trend of nuclear families and both parents being working.

senior citizen:

• Currently, the basic exemption limit for the senior citizen group (residents below the age of 80 years) is INR 300,000. Government may consider increasing such limit to INR 350,000 to cover increased inflationary cost
• The present limit of Section 80TTB of the Act, deduction of INR 50,000 for interest on bank deposits/post office deposits may be increased to INR 75,000 including interest on NSC.
• Also, considering the increase in medical cost over the years, the government may consider increasing the limit to INR 100,000 under section 80DDB, wherein the medical expenses incurred for specific diseases like malignant cancer etc. can be claimed to a minimum of INR 200,000. has been included to cover the actual expenses up to Rs. to some extent.
• The expectations of the taxpayers are manifold. It will be interesting to see how the government lives up to the expectations of a populist budget along with fiscal prudence. Any increase in disposable income in the hands of the common man would spur consumption and spur economic recovery and investment.

(Chander Talreja, Partner, Violto Partners; Puneet Gandhi, Associate Director also contributed)