What is in store for salaried individuals in the FM’s Budget 2022 speech
What is in store for salaried individuals in the FM’s Budget 2022 speech
Budget 2022 Expectations for Salaried: As a salaried individual, the expectations always remain high during the budget speech by the FM. Tax exemptions, deductions or tax proposals that can help employees save tax brings the biggest relief for most taxpayers. At the same time, cost of living seems to have gone up last year and there are work-from-home concerns that need to be addressed by the government as well.
Covid related expenses: Deduction for the expenses incurred on self/family members for covid treatment could be introduced due to the need of the hour. While a Press Release has been issued for providing relief for expenses incurred during FY 2019-20 and onwards, consequential amendments for the same are expected in the upcoming Budget. Similarly, exemption for financial assistance received by the family of an individual on his/her death was also declared in the Press Release. Therefore, a corresponding amendment in the Act is expected in the upcoming Budget.
Standard Deduction: Enhancement of standard deduction ceiling for salaried individuals from Rs 50,000 to Rs 1,00,000 (Section 16).
Work from Home Allowances: Introduction of tax-free work from home allowances for setting-up home offices and other recurring expenses.
Leave Travel Concession: Extension of leave travel concession cash voucher scheme from 31 March 2021 to 31 March 2023 (Section 10(5)).
Interest on Housing Loan: Capital limit of Rs 200,000 has been set for interest on housing loan to be set-off against other heads of income. Given that the house maintenance expenses have been increasing, salaried taxpayers owning just one house property should be compensated for the maintenance charges paid to society and property taxes paid to the local authorities.
Aarti Raote, Partner, Deloitte India
The salaried class has gone through several challenges in the past two years and the amounts expended towards healthcare, child education, cost of living have increased. There are multiple expectations of the salaried class from the budget starting from reduction in tax rates and surcharge, increase in the limits for 80 C deductions standard deduction, grant of deduction for Work from home allowance and deduction for medical expenses.
Neeraj Dhawan, Managing Director, Experian India
The expectation of citizens from the upcoming budget remains high. The suggestion that is already in the circles for the government to consider increasing the annual tax deduction limit for repayment of home loan principal under Section 80C of the Income Tax act will be a good step forward. Increasing it from the current cap of Rs 2 lakhs to Rs 5 lakhs will provide huge benefits to the salaried taxpayer and at the same time boost the real estate industry with increased housing demand. Further adjusting tax slabs with the increase in other deductions can help the salaried taxpayer, specifically the below Rs 50 lakhs per annum bracket with more money in hand.