The Finance Minister, Nirmala Sitharaman, will present the Union Budget 2022 on the 1st of February. People from almost every walk of life are expecting several big things from the upcoming budget. Right from salaried professionals and business class to big enterprises and gig workers, everyone is hoping that Union Budget 2022 will not only give some respite from the struggles they have been dealing with in the past couple of years, especially due to the pandemic, but also provide them impetus through which they can put their respective lives back on track. And it would be an understatement to say that the Indian economy is going through its worst phase in many decades.
Rising inflation and crude oil prices are amongst those things that are giving common people and the government alike plenty to ponder. Periodic lockdowns due to the rise in coronavirus cases every few months haven’t been too kind either on individuals as well as businesses. In this context, many experts are of the opinion that sectors that are worst hit due to the pandemic, including hospitality, logistics, auto, travel, and others may be on the priority list of the FM when she announces the budget on the 1st of February. And as five states get ready for elections in February, announcement of a few populist measures can’t also be ruled out. Here is a list of expectation from Budget 2021 based on what experts from different sectors have been saying over the past few months:
Remote working has become a norm post-pandemic. And many organizations are working hybrid – where some of their employees will work from home and others from office all the time. Keeping this in mind, the FM could bring tax-free home allowance for salaried professionals that are working from their homes. If this announcement is made, it will increase the take-home salary, which will increase consumption and spending.
Experts are expecting the Finance Minister to revise the slab for individual income tax in this year’s budget. It is quite evident that many people still find choosing between the two tax regimes a challenging task. Most of them are still confused about the benefits of choosing one over the other. The expectations are that the government might think about changing the highest tax slab from Rs 15 lakh to Rs 20 lakh. The government could also consider adding a few more deductions to the new regime to make it more beneficial and appealing for taxpayers.
Experts also believe that increasing the deduction limit under the NPS scheme could make it more attractive for taxpayers from an investment perspective and help them add a substantial amount to their retirement corpus. So, the expectation is that the FM may announce to increase this limit to Rs 1 lakh per year from the current limit of Rs 50,000 per year.
The popular opinion before the announcement of the Union Budget is to have a separate deduction for the education funds of the salaried class. The deduction could be anything around Rs 1.5 lakhs as per experts. Also, the expectation is to take out the education expense deduction, such as tuition fees from the standard section 80C deduction. The government could consider an independent deduction for these expenses. By doing this, the government will help the salaried class save more for the future and give them tax benefits in the present.
Experts also feel that by increasing section 80D income tax exemptions, the government can encourage more and more people to not only purchase health insurance policies but also those with the right sum assured for their specific needs.
The gig industry also has high hopes with the upcoming Union Budget. Members of the gig industry are expecting the government to announce measures for determining minimum wages workers and implementing social security cover for gig workers. They also expect the FM to announce something about the formulation of official contracts for the gig workforce.
References:
- Budget Expectations 2022 for Human Resource Sector | Economic Times | Kirti Mishra | January 21, 2022
- Budget 2022 Expectations: Experts Want FM To Revise Income Tax Slabs, Provide Tax Free WFH Allowances | India.com | Raghav Aggarwal | January 22, 2022
- Budget 2022 for salaried: Rs 50,000 Work From Home allowance, Rs 1 lakh Standard Deduction expected | Financial Express | Rajeev Kumar | January 17, 2022 2:24:53 pm
- Budget 2022: Implement social security scheme, minimum wages – gig workers’ body | Business Today | Bismah Malik | Jan 21, 2022
- NPS could get additional income tax benefits | Livemint | Sangeeta Ojha | 23 Jan 2022
