Indian Union Budget 2021-22: The budget for the financial year 2021-22 will be presented on 1 February. From this budget, the salaried class and the middle class hope that the government can give big relief on the income tax. However, experts believe that this time the income tax slab in the budget is not expected to change significantly. According to experts, salaried class and middle class are not expecting relief in income tax slab but can definitely expect relief under section 80C and section 80D in the budget.
This budget, presented on February 1, is special in many ways because it is being presented in the era of corona epidemic. In such a situation, it is expected that such provisions will be made in the budget, which will give a boost to the economy.
80C expected maximum limit of 3 lakhs
According to tax expert DK Mishra, the government has already given adequate relief package from time to time to promote industries. Mishra believes that the limit of section 80C in the budget can be increased to Rs 2.5-3 lakh. Currently, tax relief up to a maximum of Rs 1.5 lakh is provided under this section. Mishra said that the maximum limit of exemption on health insurance premium should be increased under section 80D in the budget. Currently, this limit is 25 thousand rupees.
The government does not have many options – tax expert
According to Mishra, due to the budget deficit, the government has fewer options to provide relief to the people. The government has also not been able to achieve the target of disinvestment. The government is far from the disinvestment target of Rs 2.1 lakh crore. According to Mishra, even in the current year, the government can achieve its 40 percent target, it is not possible to do so. Apart from this, according to the target set by the government, revenue also could not be collected. For all these reasons, Mishra believes that there can be some relief in the budget but no big relief can be expected.
Urge to increase the standard deduction
Currently, according to the income tax slab, tax is payable at the rate of 5 per cent on individual income up to Rs 5 lakh and after that 20 per cent tax is directly payable on the income of Rs 5-7 lakh. According to Neeru Ahuja, partner and tax expert of Deloitte India, there is a huge difference in tax rates, so the government has an option for change in the budget. Ahuja says that due to changes in work from home and lifestyle, the expenses of salaried individuals have increased, so the government should consider increasing standard deduction. Apart from this, he has also requested to increase the limit under section 80C.
Request for relief on R&D expenses
According to Ahuja, the central government has already reduced corporate tax rates but now the government should also consider giving relief on expenses like research and development (R&D). Apart from this, Ahuja says that due to Corona epidemic this year, companies have to spend extra for work from home, for which the government should provide some relief in the budget. According to Ahuja, leaving the worry of increasing the budget deficit, the government should increase its spending so that demand can increase.