Personal finance

Budget 2022: What salaried professionals want from FM Sitharaman

The common man closely tracks the changes to the personal taxation part of the Union Budget every year.

Indian households’ net savings went up after the second wave of pandemic and millions of investors took to bolder investment avenues such as stocks and mutual funds in the past two years. Therefore, it is only logical for Finance Ministry to encourage the trend by providing more tax incentives for this new crop of investors.

The demands include an increase in the standard deduction for the salaried class, an increase in the exemption limit of allowances for the salaried class which have not been revised for a long time, increase in the limit of deduction under Section 80C among others.

Sundara Rajan TK, Senior Partner, DVS Advisors LLP says, “With the increase in direct tax collections and with experts estimating it to cross the budget estimate, taxpayers expect relief in terms of increase in basic exemption limit, increase in the standard deduction for the salaried class, increase in the exemption limit of allowances for the salaried class which have not been revised for a long time, increase in the limit of deduction u/sec 80C. These are predominantly the expectations from the middle-class population.”

Numerous tax-saving investment instruments fall under Section 80C, subsections 80CCC, 80CCD (1), 80CCD (1b) and 80CCD (2) of the Income Tax Act and the current limit of Rs 1.5 lakh should be raised, feel many experts. The Rs 1.5 lakh limit has remained unchanged for a very long time now and thus there is a need to increase the said limit.

“The said Section accounts for tax savings for most individuals in India. The current limit of Rs 1.5 lakhs becomes too restrictive and thus there is need to widen horizon by offering additional investment opportunities,” feels Vivek Bansal – Executive Director and Group CFO, InCred.

Increasing deduction of interest on self-occupied properties to Rs 10 lacs will ensure higher spending towards real estate.

“While govt may lose some revenue with the deduction but will earn a lot more due to higher GST and stamp duty mobilisation. The incremental revenue will be far higher than tax loss,” adds Bansal.

Bansal also advises the rationalisation of the highest tax bracket for individuals to be in line with the corporate tax structure. This, he added, will be path-breaking reform and ensure significantly higher compliance and keep more talent within the country for innovation.

Flush with investor funds, mushrooming new-age companies and startups are putting ESOPs in the salary structures of employees. Taxation on ESOPs should be bought in line with capital gains tax given that underlying assets are capital instruments and not at salary tax rates.

Abhay Vohra, Partner, Burgeon Law says, “We expect the Union

Budget 2022

to re-look at the taxation regime for ESOPs and MSOPs that will enable startups to attract and retain talent to foster growth. The upcoming budget should lay out a comprehensive taxation regime for Crypto and NFTs which will eliminate ambiguities and provide certainty to the participants to encourage more investments & innovations on blockchain in India”.

Finance Minister

Nirmala Sitharaman

will present a paperless Budget on February 1, 2022. The ministry even launched an app where all budget-related announcements can be found.

Source: https://www.timesnownews.com/business-economy/personal-finance/union-budget-2022-what-salaried-class-wants-from-fm-sitharaman-article-89201439

Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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