The Union Budget for the financial year 2023-2024 is set to be presented in the Parliament by Finance Minister Nirmala Sitharaman on February 1, 2023. The worry of taxpayers is inflation and the downturn of the world economy. Like every year the expectations are high that Hon’ble Finance Minister Nirmala Sitharaman will announce changes in income tax slabs and rates.
This year, the budget is likely to be growth-oriented with a focus on capex, manufacturing, infrastructure, and rural economy. This budget is also the last full budget of the Government before the General elections in 2024.
Here are some of the Recommendations and Expectations from the Budget 2023
1. Expectations by Salaried Taxpayers
The most common ask from the salaried class would be to increase the basic exemption slab to at least Rs.5 lacs.
Work from home and related support in setting up home offices is now the new normal and pre-requisite to smoothly run businesses, it can no longer be considered as a benefit provided by the employer to the employees. It is recommended that support provided by the employer to set up a home office, in any manner, should not be taxed as perquisite in the hands of the employees.
2. Expectations from Exemptions sections
(i) Section 80C plays an important role for the salaried class as it offers tax savings against investments. The budget could explore increasing the 80C limits to at least Rs.15 lacs along with creating secure medium to long term investment options where the principal is exempt from tax in the year of investment and interest is exempt in the year of redemption.
(ii) Section 80D limits could be increased to at least Rs.2 lacs irrespective of age categorization.
(iii) Section 80E for education loan could be revisited to cover a larger scope of education-related expenses for Institutions in India and overseas.
(iii) Section 80L to be reintroduced for a deduction on receipt of dividends and interest other than bank interest.
(iv) 80TT & TTA the limits in this section could be increased to give more impetus to savings.
3. Expectations from real estate sector
Experts feel these proposals, if announced by FM Nirmala Sitharaman, shall be beneficial for new home buyers:
(i) The deduction of interest on housing loans may be increased from Rs 2 lakh to Rs 10 lakh
(ii) Capital Gain Relief on sale of property for Long Term Capital Gain is presently 20% which is considerably high and expected a reduction.
4. Industry expectations: Budget should resolve inverted duty structure issue
- The burden of taxes and levies is a significant portion of production cost, which puts the domestic industry at a disadvantage compared to global competitors.
- The textile industry is also facing an inverted duty structure issue. Despite the Government's efforts to resolve it, the measures taken were rolled back.
- To attract investment and enhance export competitiveness, resolving these inconsistencies in the Budget 2023 is essential.
5. Expectations by Startups
(i) The sector expects the government to reduce the minimum alternate tax (MAT) from 15 percent to 9 percent.
(ii) The sector also expects the government to introduce a single window clearance mechanism for startups to claim tax incentives.
(iii) Clearer Regulations and ease of doing business
6. Expectations By Health Sector
(i) Hospitals urge the government to focus on reducing GST and comprehensive insurance cover.
(ii) Reduction in Custom Duties and GST for cancer care.
Hope this budget 2023 brings relief to the taxpayers and is beneficial to the economy.
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