Budget Session 2022: The Union Budget for Financial Year 2022-23 will be presented in Parliament as scheduled on February 1, 2022, by Finance Minister Nirmala Sitharaman. Right before the budget, a hike in standard deduction limit is taxpayer's main demand from the Finance Minister. Taxpayers are expecting some relief in income tax.
Women entrepreneurs in various sectors of the country have great expectations from the Centre in terms of credit support and Covid incentive for women-led businesses. Here we bring you the wish list of the common man from Finance Minister Nirmala Sitharaman in the Union Budget 2022.
Increase in Standard deduction
Standard deduction is a deduction allowed from gross salary income for salaried individuals and pensioners.
This deduction reduces the taxable salary income of the individual and thereby reduces his/her tax liability.
Increase in standard deduction for salaried employees was reintroduced in FY 2018-19 after being scrapped in FY 2005-06.
The salaried class and pensioners could claim certain expenses spent on transport and medicines et cetera.
Standard deduction was introduced in place of transport allowance and medical reimbursement which were withdrawn.
The standard deduction from the current Rs 50,000 to Rs 1,00,000 is on top of the wish list of the common man.
Work from Home deduction
The Budget 2022 may introduce tax-free work from home allowances for salaried employees.
Allowing deductions for such expenses will raise the take home salary of the employees.
The take home salary raise will ultimately create demand for goods and services in the country.
Women Entrepreneurs
Female entrepreneurs in the micro, small and medium enterprise (MSME) or small business segment are expecting some sops.
Some female entrepreneurs want provisions for them from Centre with extra tax benefits, subsidies and interest-free loans.
Income tax exemption limit
New personal income tax regime was introduced in Budget Session 2020 giving option to taxpayers to choose any tax regime.
Since the tax exemption limit under both is Rs 2,50,000, the common man hopes that this will be increased to Rs 5,00,000.
Government may consider increasing the highest tax slab to Rs 20 lakh from Rs 15 lakh or allow certain deductions to make it enticing.
Union Budget 2021 did not provide any major relief to the salaried class.
Taxpayers want that in case of delayed payment of advance tax, penal interest is either waived or at least reduced by half to 6%.
Taxability of cryptocurrencies
The cryptocurrency had a remarkable year with Bitcoin crossing USD 65,000 in November 2021.
Government has clarified that it will not ban cryptocurrencies and would recognise them as assets but not as a currency.
The common man hopes that the government clears the air on the taxability of cryptos.
Much-needed clarity is expected on its taxation in Union Budget 2022 as government waits for the Cryptocurrency Bill.
Concerns also include its classification, applicable tax rates, TDS/TCS and GST implications on the sale and purchase.
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Provident Fund
In recent years, the government has decided to tax both the contribution to provident fund and the interest accruing from it.
The new rule on PF contribution and interest accrued impact adversely since the retirement corpus is taxed.
