Middle class hopes from the Finance Minister, will there be a sigh of relief in the budget on income tax? - Newztezz Online


Sunday, January 22, 2023

Middle class hopes from the Finance Minister, will there be a sigh of relief in the budget on income tax?

Budget 2023:
The middle class is eagerly waiting for some income tax reforms, which will help them reduce their tax expenditure. In this regard, he has high expectations from the budget 2023.

The countdown of Union Budget 2023 has started. The middle class is eagerly waiting for some Income Tax Reforms , which will help them in reducing their tax expenditure. In this regard, there are high expectations from his budget. The reason for this is also that this will be the last full budget of the current Narendra Modi government and the upcoming budget is expected to be a populist budget. The middle class is expecting that some of the tax limits available under various sections like Section 80C, Section 80D, Section 87A etc. will increase.

On income tax reforms that could please the middle class, Archit Gupta, Founder and CEO, Clear said, “We expect the Union Budget 2023 to leave low and middle income earners with more disposable income in their hands. This will enable them more. Households should use this extra income to meet their consumption needs.

When asked why he is expecting such income tax relief from Finance Minister Nirmala Sitharaman, Archit Gupta said that in the last few years the ongoing COVID-19 pandemic, rising inflation, war-like crisis, layoffs, medical expenses The rise and fall of the fear of a global recession have been difficult for many people. To deal with these, the Government of India will focus on increasing the demand in various industries. The middle class is expecting 5 types of reliefs in Budget 2023 from Nirmala Sitharaman on income tax reform.

Increase in basic exemption limit

Various options are being considered to boost consumption, but various reports suggest that the government is mulling to increase the basic tax exemption limit from Rs 2.5 lakh to Rs 5 lakh. This may not affect resident individuals having income up to 5 lakhs as they have always got the benefit of exemption under section 87A. However, it will do away with the need for them to file mandatory tax returns, thus supporting the government's target of making compliance easier for small taxpayers.

Section 80C limit increased

The present limit of Rs 1.5 lakh for investment deduction under Section 80C, which has not been updated in over a decade, should be increased to allow more tax savings and increase in investments.

Change in limit of section 80D

The Indian middle class is looking for ways to raise their standard of living, which includes affordable homes and better medical facilities. With the increased cost of medical insurance post Covid, the limits of these deductions should also be increased to better accommodate the financial burden on the middle class. The scope of section 80D should be expanded to include healthcare expenses like doctor's consulting charges and diagnostic test charges.

relief to home buyers

Buying a house is still considered a luxury for middle class taxpayers. To reduce this burden, taxpayers are demanding an increase in the current limit of deduction of Rs 2 lakh on home loan interest. Additionally, home buyers can also avail deduction of up to Rs 1.5 lakh on interest paid on home loans sanctioned between April 1, 2019 and March 31, 2022, under Section 80EEA. To further incentivize homeownership, the lock-in period and limit for these deductions may be increased.

Increase in standard deduction

Standard deduction was introduced five years ago in the financial year 2018-19. Now, in view of the rising cost of medical expenses and fuel, there is a strong demand to raise the standard deduction limit from Rs 50,000 to Rs 1 lakh.

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