The Union Budget of 2023 to be presented soon by the Finance Minister Nirmala Seetharaman aims to clarify many tax facets. As is public knowledge, taxes generate between 70 and 80 percent of all revenue. However, we anticipate that the government will relieve the taxpayers of their high tax pile.
It was reported that in 2021 rupees 20.16 lakh crore was collected only through tax collection that is both Indirect and direct tax.
Taxpayers believe that the government will raise the tax bracket, increasing their remaining cash. Most of the taxpayers expect that the tax slab should go up from the 2.5 Lakhs to 5 Lakhs. The lowest tax percentage starts from 5% and goes up to 30%.
In 2017, the then Finance Minister Arun Jaitley brought changes and the taxpayers were free to choose the regime i.e., old or new. The new regime has a rebate of 5% in all tax slabs however rejected certain deductions.
The exemptions and deductions not allowed under the new tax regime are Leave Travel Allowance (LTA), House Rent Allowance (HRA), Conveyance Allowance, Professional Tax, Relocation allowance, Interest on housing loan..etc.
From an investment standpoint, capital gain tax is significant. Also the percentage of tax is different for the same category of assets i.e.,certain long term assets have 10% and other assets have 20%. Common people expect to lessen the complexity of the tax rates.
The next very important expectation is on the interest limit of housing loans. House is a dream for every individual and that’s why a home loan is eligible for tax deduction under Section 80C of Income Tax Act, 1961.
According to section 24(b) of the Income Tax Act, the current interest part paid may be deducted from your total income up to a maximum of Rs. 2 lakh, however this limit is insufficient. The general public expects that as interest rates rise, the government will raise the deduction limit.
Deep anticipation surrounds the most recent and comprehensive budget of the present government. It is reasonable to believe that there will be a balance between tax rates and deductions. The ordinary citizen should not be burdened with excessive taxation without an increase in income or even a modest change in income.
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