Taxpayers shall see a dip in the tax rate from 30 percent to 25 percent for individuals having an income over Rs. 10,00,000. Budget 2022 is around the corner. As there has been a surge in Covid cases across the country taxpayers, have high expectations that deductions and tax redemptions should be provided to them.
Budget 2022 – Benefits And Expectations
This article will give you a brief overview of budget 2022, its benefits, and also an insight on what to expect. Here is all you need to know about income tax deductions and benefits.
1. A Drop-In Income Tax Rates
Presently the highest rate of income tax rate is 30 percent. Also, due to education cess and surcharges, the tax rates of some taxpayers may be as high as 42.7 percent. On the other hand, tax rates applicable for domestic companies is merely 25 percent. Taxpayers are obliged to see a drop in the tax rate from 30 percent to 25 percent for individuals having 10,00,000Rs income per annum (under the existing regime) and Rs 15,00,000 (under the new regime).
2. Increase In Various Deduction And Exemption Limits
- As the standard of living rises, so does its cost. Due to children’s tuition fees, medical fees, economical bills, the cost of living is increasing. The following amendments will increase the disposable income available for middle-class households and will encourage them to make investments.
- Increasing the limit of deduction available under section 80C of the Act to Rs. 250,000 from Rs. 150,000.
- To support property owners in hard times who have let their properties out, it is advised that the standard deduction of 30 percent must be raised to 40 percent.
- To ensure more participation in medical schemes an increase in section 80DD deduction limit for self and family from Rs 25,000 to Rs 50,000 and Rs 50,000 to Rs 75,000 for senior citizens should be taken into consideration.
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3. Work From Home Employees To Receive Deduction
Due to a spike in COVID-19 cases, the new corporate norm is to work from home. Working from home makes the employee incur additional expenses like internet, electricity, rent, and more. Hence, many employers are providing employees with reimbursement and some allowances to meet these needs. Hence employees also seek deductions when it comes to tax payment and would appreciate it if they get tax allowances due to working from home and is approved by tax authorities.
4. Here Are A Few Sector-Specific Expectations For Budget 2022
- Automobile: Reduction of GST rate on two-wheelers.
- For Insurance: Increase in deduction limit under 80C and 80D GST rate deduction.
- For Consumers: GST/import duty relief to curb rising inflation.
- For Pharma: Reinstatement of weighted tax deductions at 200 percent of in-house RandD spending.
Conclusion
These are the benefits of Budget 2022. The amount of standard deduction is low given to the periodic cost of inflation over the years the living expenditure of salaried individuals in present times. This is the reason why Budget 2022 should consider hiking this amount.
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