Budget 2023 Expectations: Standard deduction hike, income tax relief, an increase in Section 80C exemption – are some of the expectations that the taxpayers expect from Finance Minister Nirmala Sitharaman’s Budget 2023.
Budget 2023 Latest Update: With just a few days left for the Budget 2023, the taxpayers are expecting big relief from the Centre. Standard deduction hike, income tax relief, increase in Section 80C exemption to name a few – are some of the expectations that the taxpayers expect from Finance Minister Nirmala Sitharaman’s Union Budget 2023. Speaking to Live Mint, various tax experts said that they expect the Finance Minister to offer some tax reduction in the government’s final full budget before the 2024 Lok Sabha election to give taxpayers more disposable income, which will stimulate spending and give the economy a much-needed lift.
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Work From Home Allowance
The salaried employees expect that some relief should be given to individuals who are setting up a home office for work from home, said Archit Gupta. However, the list of expectations from Budget 2023 is long and all will have to wait till 1 February 2023 to see how many of these were fulfilled.
Standard deduction hike
For employees and pensioners, the standard deduction is a deduction taken from gross salary income. The standard deduction lowers the individual’s taxable salary income, lowering their tax burden as well. As part of the former tax structure, which is still utilised by the bulk of filers, all salaried employees are entitled to a Rs 50,000 deduction.
“A deduction limit that has stayed steady in recent years should be increased to account for growing living costs,” Amit Gupta, MD, SAG Infotech, told Live Mint.
Increase 80C exemption
All salaried employees can take advantage of Section 80C exemptions to reduce their taxable income by Rs 1.5 lakh in a fiscal year.
Archit Gupta, Founder and CEO of Clear told the news portal that the limit for 80C has been set to Rs 1,50,000 for a long time and it is expected that the limit for 80C is to be increased to meet the requirement of today to at least Rs 2,00,000.
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Rejigging tax slab rates
Earlier, the Centre had announced a new, optional tax regime while presenting the budget 2020. However, the new tax regime has found few takers till date.
Amit Gupta said that the smallest individual income tax bracket is 5%, while the highest is 42.74 percent, including surcharges and cess. He added that a raise in the basic exemption level between Rs 2.5 lakh to Rs 5 lakh, as well as a cut in income-tax rates in Budget 2023, is required to reduce the maximum slab rate to 25%.
