Income tax pads and other personal tax expectations
Like every year, the Union Finance Minister has the difficult task of balancing public expectations and presenting a budget that would put India back on the path to growth, especially after the long disruption caused by the pandemic. of ongoing Covid-19 which has affected the whole country. nation in more ways than one.
Although significant relief measures have been taken by the government to keep the situation under control, the Union budget for 2022-2023 offers citizens and taxpayers the hope of additional relief measures to continue to fight against the pandemic.
Direct tax proposals form an important part of the budget since the revenue from these direct tax collections contributes a significant share to the government’s total revenue. In turn, both corporate and non-corporate taxpayers eagerly await the proposals presented in the budget in hopes of lower taxes and more cash.
Due to the unprecedented circumstances and expectations of the salaried class; the upcoming budget could soften the ongoing blow from the pandemic through an increase in the threshold for deductions, the introduction of a deduction for a work-from-home setup, and several other relief measures.
While the introduction of a new tax regime appears to be a welcome move, taxpayers must forego certain deductions and exemptions to take advantage of the reduced tax rates. However, a large portion of taxpayers are more inclined to invest in tax-deductible schemes because of the dual benefit, i.e. savings for the future and a reduction in the current tax burden. Therefore, opting for the new tax regime does not seem particularly advantageous for this category of taxpayers.
Furthermore, the top tax rate in both regimes (i.e. old and new) ranges from 31% to 43% after including education tax and surcharge which is burdensome for taxpayers. The government should reduce tax rates to provide more cash to taxpayers.
As the Finance Minister’s unveiling of the 2022 Union budget approaches, let’s take a look at some of the expectations of the employed taxpayer.