Indian Union Budget 2021-22: In the last quarter of the financial year, everyone is waiting for a Union Budget from the most awaited Annual Policy Announcement by the Government. There are only a few days left to present the budget, in such a way, individual taxpayers also have great expectations from the budget. This time the expectations may be more, because both the life and income of the common man has been affected by the Carona virus epidemic. Apart from this, it is important for the government because the corona virus has affected the overall economy.
From the government aspect, some reforms have already been announced to bring the economy back on track. Apart from this, several measures have been taken to boost domestic consumption of goods and services in particular and to accelerate the economy. Now these measures should be evaluated in the budget. Currently, this is a special feature of personal taxpayers in the budget.
Separate deduction for COVID-19 treatment
Presently, certain deductions have been prescribed under Chapter VI-A of the Income Tax Act, 1961 for medical treatment for handicapped / self-sufferers suffering from disability / severe disability (Section 80DD, 80U of the Act). At the same time, there is this provision for pressurized diseases (under Chapter 80DDB of IT Act). However, there are no special deductions under the Act that cover treatment costs for patients with COVID-19 who are not covered under any health insurance.
Donations to the PM CARES fund designed specifically for COVID-19 are eligible for 100 per cent deduction under Act 80G, but no deduction has been notified for expenses incurred on treatment of this disease. Depending on the cost involved in treatment of COVID-19 in government or private hospitals, there should be a provision for a separate deduction up to Rs 1 lakh or in the actual treatment cast, whichever is less.
Facility for work from home
The lockdown caused by the COVID-19 epidemic in March 2020 has also affected employees. The culture of work from home started due to the lockdown. During such a situation, many companies attempted to put up infrastructure through high-speed internet, printers, desktops, stationery, etc. in addition to furniture (eg tables, ergonomic chairs, etc.) for ease of working in their employees’ accommodation, So that a suitable working environment can be created.
Some companies have decided to give a fixed allowance to the employees to meet the expenses on such furniture and other items. While others decided to give reimbursement. While both allowances and reimbursements are for business requirements, there is a possibility of taxation. In such a situation, the government should make a provision for giving relief on them in the budget.
Determination of income slab / tax rate
Income tax exemption limit for individual taxpayers below 60 years is 2.5 lakhs per annum. There is no change in this limit from FY 2014-15. Last year Budget 2020 provided some relief by allowing taxpayers to choose between the existing tax system and an alternative alternative new tax regime. With a view to further simplifying and increasing net disposable income, it may be considered whether the basic exemption limit can be increased under the existing tax regime.
In order to accelerate the momentum in the real estate sector, the government may increase the standard deduction of 30 per cent of net annual value to 50 per cent. Or increase the current limit of deduction of interest payable on housing loans on self-occupied property to 4 lakhs per annum.
Deduction at 80C
Apart from this, under Section 80C of the Enum Tax Act, the government should increase the exemption limit from Rs 1.5 lakh. This will make people more attracted to savings. Let us know that many tax savings investments come under this section. The government can consider increasing it to 3 lakhs.