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The final countdown to Union Finance Minister Nirmala Sitharaman’s fourth budget has begun, and with this various sections of society, including the taxpayers, common man and the salaried employees, have set their sight on it as they have huge expectations from Budget 2022-23 amid the ongoing Covid-19 crisis.

According to the common people in the country, Union Budget 2022-23 should be made keeping the middle-class people in mind amid the post-coronavirus scenario.

Here's what the salaried class expects from the budget:

- Experts hope the upcoming Budget will provide tax incentives to salaried individuals in the form of enhanced deductions from salary income and tax savings on schemes qualifying under Section 80C.

- Employees Provident Fund: 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. 

As per the Institute of Chartered Accountants of India (ICAI), this limit is harsh for EPF accountholders planning their own retirement and contributing to PF to maximise their savings. The ICAI has proposed that in the upcoming Budget 2022, the Centre should raise the 2.5/5 lakh limit to at least 7.5 lakh.

- On crypto taxation, experts feel it is important that the upcoming Budget clarifies the ambiguity regarding taxation of cryptocurrency and clearly spells out the provisions relating to new age investments or carrying-out business transactions.

- Direct taxes

1. 80C deduction available up to 1.5 lakh a year be revised upwards significantly; 

2. To make the optional concessionary tax regime, which came into effect from April 2021, more acceptable, raise the threshold 15 lakh income for laying peak 30% tax rate; 

3. The burden of the long-term capital gains tax (LTCG), introduced vide Finance Act 2018, has somewhat dented investor confidence. Major economies do not have LTCG tax. In India too, it is expected that LTCG on the sale of Indian-listed equity shares will be exempted as it would boost investment through the stock exchange. 

4. Corporates are expecting that the entire amount, or an appropriate proportion of expenditure incurred for helping the society and employee welfare during Covid-19 will be allowed as deductible expenditure. Also, the government is expected to reduce the tax rates for companies engaged in R&D activities to 15 per cent or less and allow weighted deduction on in-house R&D expenditure. 

- Indirect taxes

1. Rationalisation of Customs duty structure for EV and ancillary components, renewable energy generation devices and related components is likely. 

2. Sector specific concessions for semi-conductor manufacturers with focus on exports is expected. 

3. Budget allocations for the expansion of the PLI scheme for sectors such as leather and laminates; additional incentive schemes will also lure companies into setting up additional manufacturing in sectors that were not the focus in previous budgets and help reverse the impact of the pandemic. 

4. The government is already reviewing 400 customs duty exemptions (as announced in the previous budget). The final list is expected to be proposed as part of the 2022 budget and industry is awaiting it so that there is no adverse impact on trade as a result of this exercise. 

5. Extension of customs duty exemption on goods imported for testing, and setting up of a customs dispute resolution forum, ease compliances under customs, and integration of the current ICEGATE, DGFT and SEZ online portal into a common digital platform.

- Budget 2022-23 might introduce tax-free work-from-home allowances for salaried employees. FM Nirmala Sitharaman may provide some relief to the salaried class in Budget 2022 such as a hike in standard deduction to 1 lakh from the current 50,000.

- Separate income tax deduction for Covid-19 treatment - At present, a few deductions have been prescribed under the Income-tax Act, 1961 for medical treatment for self or dependent suffering from disability/severe disability, medical treatment of prescribed diseases and ailments.

However, there is no specific deduction under the Act that will cover treatment cost for patients infected with coronavirus who are not covered under any health insurance.

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