Budget 2022: Experts believe that two income tax regimes are confusing and the existing income tax slabs must be revised. Also, they suggest that the government should focus more on increasing the consumption demand and private investments in the economy.
New Delhi: Budget 2022 is all set to be announced on February 1, 2022. The Budget 2022 date was announced by the government earlier this month. It also announced that the Budget Session of the Parliament will commence from January 23, 2022. In the list of Budget 2022 expectations, it would only be fair if we rank the expectations related to income tax of the aam aadmi on the top.
The salaried individuals have been working from home for the last two years due to the pandemic. A lot of them have faced salary cuts and a fall in household savings. In all this, the middle class or aam aadmi of India sees the Budget 2022 with the hope of some positive readjustments. Experts want a revision in the existing income tax slabs
‘Revise Income Tax Slabs, Two Tax Regimes Confusing’
According to Archit Gupta, Founder and CEO of Clear, “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.”
Currently, India has a progressive tax regime. Individuals with a higher income have to pay higher taxes. Individuals below the income of Rs 2.5 lakh per annum are free from paying any income tax. Individuals till Rs 5 lakh of per annum salary have to pay 5 per cent tax on the amount above Rs 2.5 lakh.
Gupta also added, “Budget 2021 did not provide any major relief to the salaried class.”
Tax-free Work From Home Allowances
Speaking on individuals who have been working from home, Gupta said, “Budget 2022 may introduce tax-free work from home allowances for salaried employees. Allowing deductions for such expenses will raise the take-home salary, ultimately creating demand for goods and services in the country.”
The slowdown in the economy, according to various media reports, has been largely attributed to the fall in private consumption and investment expenditure in the last few quarters.
Gupta is not the only one who believes that demand for goods and services must be boosted. According to Saket Dalmia, Senior Vice president, PHD Chamber said, “As the countdown begins for the Union Budget, industry members are hopeful this year budget would focus on refuelling consumption demand, enhancing private investments and creating avenues for employment creation.”
The Budget 2022 will be tabled by Finance Minister Nirmala Sitharaman. Aam Aadmi is eagerly waiting for some good news on the income tax front.
