Union Finance Minister Nirmala Sitharaman will be presenting the Union Budget 2021 on February 1. This is going to be India's first-ever paperless Union Budget after Finance Minister Nirmala Sitharaman launched the Budget mobile app a few days ago.
Unlike the past, the voluminous Budget documents will not be printed this year, following the COVID-19 protocol, and will instead be distributed electronically to the Members of Parliament (MPs). The economy is still reeling from the effects of COVID-19. The budget comes against the backdrop of recession with growth in two consecutive quarters in the red.
Here are certain money-saving announcements likely to be announced by the Finance Minister:
Capital Gains
The treatment of equity mutual funds at par with unit-linked investment plans (ULIPs) is also on the Budget wishlist and while equity funds are subject to long-term capital gains at 10 percent above Rs 1 lakh, for a holding period of more than one year, ULIPs enjoy the tax-free treatment of gains. There is a need to increase the threshold for long-term capital gains arising from the sale of listed securities to Rs 2 lakh and reduce the tax rate to 5 percent.
Enhancing 80C
The ailing economy has led to the rise in expenses and the axing of income and individual taxpayers are looking for some sign of relief. Some experts suggest that Section 80C needs further enhancement in terms of its limit and they are anticipating an increase in Section 80 C limit to Rs 3 lakh from the existing limit of Rs 1.5 lakh, last changed in.
New Income Tax Rates
There is a possibility that tax rates might be further reduced as the current rates haven’t been opted by a large number of taxpayers, suggests anecdotal evidence. The primary reason to reduce the tax rates further is that out of the 70 exemptions and deductions – that need to be given up when you accept the new tax regime – many are linked to expenses and not just additional investments to be made for tax savings.
NRI Stay In India
The non-resident Indians who got stuck due to the pandemic want to see if there is anything for them in the upcoming budget as they would expect not to be taxed in their stay in India. There is also a limit of less than 729 days to have adhered over the last seven financial years.
Health Insurance
There is a dire need to increase the limit of health insurance as the cost of these insurances is quite high and especially during a pandemic, the budget should have changes in the limit. Currently, a total of Rs 75,000 (Rs 25,000 for self and Rs 50,000 for senior citizens) can be deducted from taxes against payment of health insurance premium under Section 80D.
(With Zee News inputs)
