Budget 2021-22: Income Tax Returns slab, exemption limit changes - What middle class is expecting from FM Nirmala Sitharaman
Everyone has high hopes from the Union Budget 2021, especially after Coronavirus-induced lockdown led to job loss, pay cut and burdened people and firms with ever-mounting debt.
Everyone has high hopes from the Union Budget 2021, especially after Coronavirus-induced lockdown led to job loss, pay cut and burdened people and firms with ever-mounting debt. Middle class would be looking at Finance Minister Nirmala Sitharaman to increase the income tax returns (ITR) slabs and provide the much-needed relief to the pandemic-hit common man.
Every time there is a budget, the most important thing that a common man expects from it is to get relief in the income tax slab. After the Finance Minister made a big statement by saying that the Budget 2021 would be like never before, it has only made people to believe that the much-required relaxation in the tax bracket is only round the corner.
However, as per media reports, it appears that the government will keep the income tax returns slabs intact, but it also suggests that in order to provide relief to the middle class and increase spending, the government might take other measures.
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It is widely anticipated that the government might increase the income tax exemption limit from Rs 1.5 lakh to Rs 2lakh to boost savings, healthcare and affordable housing.
Speaking to a Business Today, a source in the Income Tax (I-T) department asserted that changes to the exemption limits in the personal income tax have been discussed.
“Tax exemption limit of Rs 1.5 lakh on savings is likely to be reworked. It may go up to Rs 2 lakh”, the portal quoted the source as saying.
Also Read: LIVE Budget 2021 - What FM Nirmala Sitharaman said | Full coverage and highlights here
Budget 2021: Top 5 demands of common man, salaried class people
1 Income Tax Returns slabs:
Changes in ITR slabs would be one of the top demands of every man and they would want the government to make as this would enable them to save more money in taxes in these difficult times. Some reports are hinting at some changes in the slab rates of the new tax regime giving more headroom for taxpayers to save.
2 Income tax exemption limits under section 80C
Everyone must be looking at Finance Minister Nirmala Sitharaman with high hopes when she presents here third Union Budget. Common man is also be expecting the government to increase deductions under section 80 C. Currently, the deduction limit under section 80C of the Income-tax Act, 1961 (Act) for specified tax-saving investments is Rs 1.5 lakh and it is expected that the Finance Minister would tinker with this specified limit to help taxpayers save some more money. This is most possible provision that the government would make as it affects every taxpayer, and it will further encourage them to pay their income tax honestly. It is expected that the government might increase this limit up to Rs 2.5 lakh.
3 Long-term capital gains on equity and mutual funds
Presently, long term capital gains from sale of listed equity shares and mutual funds get tax-exemption up to Rs 1 lakh. Above Rs 1 lakh, it is subjected to 10% tax and other cess. This would be the top demand of retail investors. Any positive changes in this limit will promote investment and encourage people to invest in the stock market. Most people are expecting that the government should look increase the exemption limit from Rs 1 lakh to Rs 2 lakh for retail investors.
4 Leave Travel Concession (LTC) Cash Voucher Scheme
This section has been directly impacted by the Covid 19 challenges. As most part of the last year remained either under lockdown or restrictions, central government employees could not avail LTC. Later, the government introduced the LTC Cash Voucher Scheme as an alternative. The scheme allows cash equivalent to LTC fare and leave encashment to be paid by way of tax-free reimbursement. Legislative amendments to adopt the scheme are expected to be introduced in the budget. It is also expected that the government could extend this scheme beyond March 2021.
5 Provisions for Work from Home
Work from home (WFH) is now a new normal after coronavirus-induced lockdown forced everyone indoors. Many firms have even made it a permanent feature, however, employees now have to spend more on extra allowances. Even most of these firms which started WFH have to spend a lot on extra expenses like laptop and good internet. Experts suggest that the government may introduce some aid for salary drawing employees to support their extra allowances while working from home.
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