Income tax: From higher exemption limit to LTCG, 5 expectations from FM Sitharaman in Budget 2022
- The Union budget will be presented by Finance Minister Nirmala Sitharaman at 11 am on February 1, 2022
With Budget 2022 just a few days away, tax relief on income tax, long-term capital gains (LTCG), STTs are some of the expectations from Finance Minister Nirmala Sitharaman in this year's Union budget which will be presented in the Parliament at 11 am on February 1, 2022. Meanwhile, the Economic Survey will be tabled at noon on January 31.
LTCG
"Some measures that are expected on the capital gains tax perspective can be; from stand point of an individual tax payer, it is the expectation of the investors to reduce the rate of tax on long term capital gains so as to provide better incentives for holding shares for a long term horizon. This will also provide more stability to the stock market with inflow of funds for longer horizon," said Saurrav Sood, Practice Leader (International tax & Transfer Pricing), SW India.
Further, from capital gains tax exemption, Sood believes that the time period of construction of new house property should be increased from present 3 years to 5 years, considering that under current situation, such time period is an average time to complete a high rise building.
STTs
"The general expectation of a common man is to pay less taxes, which is a fair expectation. With STT being an indirect tax in itself, it was introduced in 2004 by the then Finance Minister Chidambaram to prevent the unreporting of capital gains transaction. Since, now all the DEMAT accounts are tagged with PAN of the person, the purpose of STT has outlived its useful life and should be abolished," as per Saurav Sood.
Income Tax
The Finance Ministry may revise the personal income tax slab in this year’s Budget. Many experts believe that the two tax regimes still confuse the common man.
“The government may consider increasing the highest tax slab to Rs.20 lakh from Rs.15 lakh or allow certain deductions to make the new regime more enticing. Budget 2021 did not provide any major relief to the salaried class,” said Archit Gupta, Founder and CEO – Clear.
80C limits
The particular tax deduction limits are expected to be increased this year. A higher deduction under Section 80C may be permitted for the Equity-Linked Savings Scheme (ELSS), or a separate limit can be defined to encourage more mutual fund investments in India, as per experts.
80D limits
Further, a special Covid expense related deduction may be allowed under Section 80D or 80DDB to provide tax relief for Covid-19 patients and their families, as per Gupta.
"The limit of health Insurance under section 80D should be increased from ₹25,000 to ₹50,000 and ₹1,00,000 for families and completely removed or raised further for senior citizens," said Supriya Rathi, Wholetime Director, Anand Rathi Insurance Brokers.
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Business NewsBudgetBudget ExpectationsIncome tax: From higher exemption limit to LTCG, 5 expectations from FM Sitharaman in Budget 2022
First Published:27 Jan 2022, 05:44 PM IST
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