Union Budget: Salaried class have nothing to cheer
Hyderabad: There is nothing for the common man, particularly the salaried class. There have been no tax exemptions, deductions or tax proposals that can help employees save tax. These expectations stemmed from the rising cost of living and also higher Covid-related spend. Also, there have been many concerns related to work-from-home, which many hoped will […]
Hyderabad: There is nothing for the common man, particularly the salaried class. There have been no tax exemptions, deductions or tax proposals that can help employees save tax. These expectations stemmed from the rising cost of living and also higher Covid-related spend. Also, there have been many concerns related to work-from-home, which many hoped will be addressed by the Government in the Budget.
The Middle Income Groups felt a need for introducing a deduction for the expenses incurred on self/family members for Covid treatment. Earlier, a press release was issued for providing relief for expenses incurred during FY 2019-20 and onwards, consequential amendments for the same were expected in Tuesday’s Budget.
Also, many expected an enhancement of standard deduction ceiling for salaried individuals from Rs 50,000 to Rs 1,00,000 (Section 16). But nothing has been said on this. Many suggested introduction of tax-free work-from-home allowances for setting-up home offices and other recurring expenses. Also, salaried taxpayers, owning just one house property, wanted to be compensated for the rising maintenance charges paid to societies and property taxes paid to the local authorities.
Also, the costs of healthcare, child education, cost of living have increased due to the Covid. Many thought an increase in the limits for 80 C from the current cap of Rs 2 lakhs to Rs 5 lakh was on the cards as it would put some money in the hands of people. This would have provided benefits to the salaried taxpayer and at the same time boost the real estate industry. Many also wanted a downward revision of the income tax slabs. But no change has been announced on these lines.
“There have been large scale expectations of the income tax exempt level increasing from Rs 1.5 lakh to at least Rs two lakh. There were also expectations about a standard deduction of Rs 25,000. The salaried class is utterly disappointed. There are no announcements for other segments too,” said VS Sudhir, Chartered Accountant and Chair- GST and Customs Committee of FTCCI.
In the last Budget, the Centre proposed to tax income on Provident Fund (PF) contributions above ₹2.5 lakh in a year. This limit was further increased to ₹5 lakh for PF accounts having no contribution from employers. The Institute of Chartered Accountants of India (ICAI) flet the limit was harsh for EPF account holders planning their own retirement and contributing to PF to maximise their savings. The ICAI had proposed that the Centre should raise the Rs 2.5/5 lakh limit to at least Rs 7.5 lakh.
The long-term capital gains tax (LTCG), introduced via the Finance Act 2018, has dented investor confidence. Major economies do not have LTCG tax. It was expected that LTCG on the sale of Indian-listed equity shares will be exempted. Also, there were expectations from the Budget for incentivising the insurance sector and also a separate income tax deduction provision for Covid-19 treatment.
“The salaried class has been completely ignored. Also, no heed has been paid to the several pleas and requests from Telangana. There are no allocations to pharma and industry segments despite think tank Niti Aayog’s suggestions,” said industry body FTCCI president K Bhasker Reddy.
If the taxpayer wants to pay additional taxes and amend an already filed return, it can be done now, within two years from the end of the relevant assessment year. The intention is to pay any unpaid taxes without severe consequences, in case they have made a mistake at the time of filing and return is already possessed, said Archit Gupta, Founder and CEO, Clear.
