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Budget 2022 expectations: After Economic Survey painting India in an optimistic light with good macro-stability indicators, earning individuals and taxpayers are expecting some relief form Nirmala Sitharaman when she presents her fourth general budget today. From raise in annual limit of Section 80C of the Income Tax Act to PPF deposit limit, taxpayers are expecting some relief in income tax slab as well.
Asked about the top 5 reliefs that taxpayers are expecting from Nirmala Sitharaman today, Pankaj Mathpal, MD & CEO at Optima Money Managers listed out the following:
1] Raise in annual limit of Section 80C: Taxpayers across nation are awaiting Nirmala Sitharaman's response to Institute of Chartered Accountant of India's (ICAI's) suggestion to raise annual limit of Section 80C from current ₹1.50 lakh to ₹3.0 lakh. It was last raised from ₹1.0 lakh to ₹1.50 lakh in 2014 and both ICAI and taxpayers feel that Narendra Modi government should enhance this Section 80C limit.
2] Raise in Public Provident Fund or PPF deposit limit: Like Section 80C limit, ICAI has suggested Narendra Modi government to double the annual PPF deposit limit from current ₹1.50 lakh to ₹3.0 lakh. Income taxpayers are expecting an announcement from Nirmala Sitharaman in this regard in the upcoming budget today.
3] Change in income tax slab: Two years ago in Union Budget 2020, Nirmala Sitharaman had introduced dual tax regime where she introduced a new tax regime giving standard deduction to taxpayers from ₹2.50 lakh to ₹5.0 lakh annual income, which led to no income tax on up to ₹5.0 lakh annual income. However, to avail this new tax regime, the taxpayer had to lose all tax claim benefits like Section 80C, Section 80CCD, home loan interest repayment, home loan principal repayment, child school fee, etc. This year, taxpayers are expecting from the Narendra Modi government to roll out single tax regime that will comprise income tax slabs of existing new tax regime along with tax benefit claims of the old regime.
4] Support to equity investments: Taxpayers are also expecting from the Union Finance Minister Nirmala Sitharaman to announce relief to equity-linked investments like ELSS mutual fund, Ulips, etc. They are expecting separate section for tax relief claim rather under Section 80C as salaried taxpayers opting for Provident Fund (PF) or National Pension Scheme (NPS); almost exhaust their ₹1.5 lakh annual exemption limit. So, announcing separate section for claiming tax benefit on equity-linked investments is also being expected from Nirmala Sitharaman today.
5] Raise in tax benefit claim on home loan interest repayment: Home buyers paying home loan EMI are expecting raise in income tax exemption on home loan interest repayment under Section 24 be raised from existing ₹2 lakh to at least ₹3 lakh as they house property prices are so high that a ho9me buyer needs to pay at least ₹3 lakh to ₹3.5 lakh home loan interest per annum on their home loan principal.
