IANS | New Delhi
T.The Daily Tribune – www.newsofbahrain.com
White-collar workers or the middle class could be disappointed with the Union budget that Finance Minister Nirmala Sitharaman will present on February 1st as the government is likely to leave income tax slabs untouched.
However, experts believe that the white-collar or middle class could get some relief under Sections 80C and 80D.
A source in the income tax department told ANI that stories about the budget are posted daily on various news platforms. However, they are far from the truth.
Sources said that some people make their own assumptions and they suggested not jumping to a conclusion. Proposals are discussed at the highest level and no one knows what will be decided, they added.
Tax experts speaking to ANI also agreed that there will be no major tax breaks in this budget.
“White-collar workers and the middle class have great expectations of some tax break. From what I’ve seen for the industrial sector, the government has already given enough stimulus packages from time to time to give the industry a boost. The expectation is that the government will increase the 80C limit from 1.5 lakh to around 2.5 lakh to 3 lakh, ”DK Mishra, a tax expert told ANI.
Mishra said there is also a call to raise the Section 80D health insurance premium limit, which is currently Rs 25,000.
“As an expert, I see that the government has little room for maneuver due to the budget deficit. The government failed to achieve the divestment goal. We should remember that the revenue collections do not match the target projection either. We are far from the divestment target of Rs 2.1 billion.
It seems that the government cannot achieve 40 percent of the divestment target this year.
When you look at all of these aspects, there may be little relief on Mediclaim insurance, or there may be some threshold increase or a small relief to the pay grade, but I don’t see any major tax relief in this budget, ”added Mishra added.
Neeru Ahuja, tax expert and partner at Deloitte India, said blanket rates for individuals are up to Rs5 lakh 5 percent and then Rs 5-7 lakh immediately 20 percent.
“This is a big loophole, so there is room for the tax rate moderation for individuals. Employees have incurred additional costs this year because they have worked from home and their lifestyle has changed. Therefore, there is an expectation that the standard deduction should be increased. The 80C limit that has been set for many years also needs to be increased, ”said Ahuja. According to Ahuja, the corporate sector has valued government programs such as production-related incentives.
The government has already lowered corporate tax rates, but there is still a need to review certain types of spending, such as incentivising research and development spending. Similarly, during this pandemic, companies have been spending on employees by reimbursing some of their work from home, so there should be clarity on the part of the government.
“This is an extraordinary year and it requires an extraordinary situation to be addressed. I think it would be fine even if the budget deficit was hurt. The need of the hour is to stimulate demand, increase government spending and find ways to increase revenue, too, ”Ahuja said.
Sharad Malhotra, president of Nippon Paint India, said as the economy bounced back from Covid-19, pent-up demand had boosted consumption in the country. For the 2021 Union budget, measures that further stimulate demand and boost consumer sentiment remain the most important aspect for our industry.
“We also look forward to the government’s incentives for consumers through tax breaks and other measures. We hope for stepped-up action that will improve India’s rank in business facilitation and meet the government’s goal of increasing manufacturing to 25 percent of GDP, ”Malhotra said
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