For the past few years, the budget hasn't brought too much cheer for tax payers. Although a new exemption-less tax regime with lower taxes was announced in 2020, it hasn't seen too many takers. This year, expectations are high that there will be some significant announcements related to personal taxation. Nitin Baijal, Director, Deloitte India lists out what he believes the budget may include this time round.
Tax slabs
With the new exemption-less tax regime not taking off, there could be some announcements with the aim of making the new tax regime more attractive. It is also expected that the budget tinkers with the tax slabs in the old regime as well.
Sections 80C & 80D
There has been no change in section 80C limits for the last 8-9 years. The limit needs to definitely be hiked from Rs 1.5 lakh to Rs 2.5 lakh. Another important point is that tuition fee should be put into a seperate category and not fall under section 80C.
Healthcare costs have also been rising. Exemption under section 80D must be hiked.
Long term capital gains tax
LTCG definitely needs a relook. There should be LTCG parity among asset classes. The investments tax structure must be made easier. With the current LTCG which is different for investments in different asset classes, it can get confusing for the investor.
Work from home expenses
An introduction of a section for exemptions related to expenses and allowances for work from home would be very useful. Especially in terms of electricity reimbursements for example or people buying furniture from the market.