Finance Minister Smt. NirmalaSitharaman will be presenting the Union Budget 2022 on 1st February 2022, Tuesday.
With inflation sky-rocketing lately, taxpayers would be seeking relief through rebates or tax deductions in Budget 2022-23. Let’s take a look at some of the key expectations that salaried individuals, companies, economic experts, tax experts, and other taxpayers have from Union Budget 2022.
What to expect from the Union Budget 2022?
Let’s check out some of the key expectations of Budget 2022-23.
- Deduction in the form of “work from home” allowance
A majority of companies opted for remote working in view of the public health crisis. Salaried individuals are expecting a tax deduction on allowances they receive for expenses such as internet charges, rent, electricity, and others. Such deductions will increase the in-hand salary figures.
- Raise in the standard deduction
With an increase in the government’s direct tax collection, there is the possibility that it might raise the standard deduction for salaried individuals. The current standard deduction stands at Rs. 50,000.
- Increase in deduction limits under Section 80D
The government can include a deduction for expenses incurred due to COVID-19 treatment. Taxpayers expect a raise in the deduction limit of Section 80D or 80DDB to offer tax relief for families and patients affected by COVID-19.
- Increase in deduction limit of Section 80C
The deduction limit under Section 80C is expected to be raised as the government has not revised it lately. There could be a rise in the deduction limit for investments in ELSS. In fact, the Government might introduce a separate limit for such investment options to further encourage mutual fund investments.
- A revised tax regime
The previous year’s budget did not offer any significant relief to salaried taxpayers. A few taxpayers were able to avail concessional tax rates in FY2020-21. Experts believe the government would increase the highest tax slab from Rs. 15 lakh to Rs. 20 lakh to make room for certain deductions.
- Reduction in e-Invoicing turnover limit
The current turnover limit for e-Invoicing applicability stands at Rs. 50 crore. The small and medium-sized business sector expects a reduction in this threshold limit. This will help both SMEs and large corporates that conduct business with them.
- Clarity on cryptocurrency taxation
India is one of the most significant players in the crypto space, with over 15 million crypto investors. Various crypto startups of India are looking for a well-defined taxation policy for cryptocurrencies that would lay down all regulations, exemptions, legislations, etc.
- Elimination of MAT
The aviation sector has been badly hit by the pandemic. This sector expects that the government will provide a tax break by eliminating the Minimum Alternate Tax for at least two years.
- GST input tax credit for the hospitality sector
Massive loss, slim profit margins, and continuous job loss created havoc in the hospitality sector. Expectations are that the government will reintroduce GST input tax credit in this budget. Moreover, it wants a furlough scheme or an insurance policy to protect restaurants from future losses.
Every segment of society will look forward to a progressive Budget which ultimately leaves more money in hand. Expectations remain high since the economy has started reviving since the last Union Budget and the government is likely to fuel this growth further.
A Glimpse of Union Budget 2021-22
Budget 2021 focused on six key pillars to revive the Indian economy affected by the global health crisis. These six pillars were:
- Minimum government and maximum governance
- Reinvigorating human capital
- Innovation and R&D
- Health and well-being
- Physical and financial capital and infrastructure
- Inclusive development for aspirational India
Here are some of the significant highlights of last FY’s Union Budget:
- Total capital expenditure for the fiscal year 2021-22 was Rs. 5.54 lakh crore
- Increase in limits for FDI in the insurance sector to 74% from the previous limit of 49%
- Divestment of one insurance company and two PSBs
- Increase in limit for audits under Section 44AB to Rs. 10 crores from Rs. 5 crore
- Relaxation in IT return filing for senior citizens of 75 years and above
- Extension of tax holiday for start-ups for one more year up to 31st March 2022
- Plan to allow pre-filing of tax payment, TDS, salary, etc.
- Amendments in Section 44ADA and Section 43CA
- Declaration of PradhanMantriAtmanirbharSwasth Bharat Yojana with an allocation of Rs. 64,180 crore for a period of 6 years
- Elimination of GST audits for businesses, thus allowing companies to file an annual return without using certified statements from a CA.
Indeed, there are numerous expectations across different sectors, industries, and taxpayer categories from the Union Budget of 2022. So, the government has to do more than just provide stimulus to keep the economic runs of the country intact.