Union Budget 2023: The Union Budget 2023 is coming at a time when the fear of recession in the world and the Kovid epidemic have increased the inflation rate. In such a situation, from the common citizens to the industry, there are special expectations from this budget. The biggest expectation is being made regarding the tax rates. Experts believe that there can be six major changes in the budget regarding tax.
Taxpayers are expecting the government to increase the tax exemption limit in the Union Budget 2023-24. In a conversation with Live Mint, CA Abhishek Soni, co-founder of Tax2Win, has expected six changes regarding tax. Let us know what are these changes, about which the government can consider.
Tax exemption limit expected to increase
The tax exemption limit is 2.5 lakhs annually under the new and old tax regime. This means that those earning Rs 2.5 lakh annually will not pay any tax. On the other hand, a person earning an annual income of Rs 5 lakh pays a slab rate of 5 per cent. There has been no change since the financial year 2014-15. In such a situation, this time this limit can increase up to Rs 5 lakh.
Increase in home loan deduction limit
You can claim tax exemption of up to Rs 2 lakh for the home loan taken against your own property. It is expected to be increased to Rs 3 lakh under section 24(b) in the upcoming budget. Although the price of property has increased significantly in the last five years and the country has seen an increase in the inflation rate by 6 to 7 percent, there has been a demand for increasing relief in this item for a long time, which is expected to be fulfilled in this budget. .
Standard Deduction Limit
Under the current taxation system, salaried individuals can claim standard deduction of up to Rs 50,000. This deduction can be claimed only on salary income without any declaration and proof. Salaried class taxpayers are now expecting this claim to go up to Rs 1 lakh.
Exemption limit under section 80C
Under Section 80C of Income Tax, most people take advantage of tax savings. Under PPF or EPF, ELSS, NSC, NPS, SSY and other schemes, people are saving tax up to Rs 1.5 lakh under section 80C, but with the increase in income, this total tax exemption limit seems to be slightly less. It is expected that the government can increase it up to Rs 2.5 lakh. If the Finance Minister does this, then the middle class and lower class people can get maximum relief.
Increase in deduction limit under section 80TTA
Under Section 80TTA of Income Tax, a tax exemption of Rs 10,000 is given on the interest of the savings account. However, in today’s time, the number of people depositing and investing money in the bank has increased. In such a situation, it is expected that the tax exemption under this section can be increased to Rs 20,000.
Changes in the tax scheme for professionals
Professionals like business consultants, experts can get exemption in this budget under the taxation scheme under Section 44ADA. Now they have to pay 50 per cent tax. If their annual income is Rs 50 lakh, then 50% of the total profit or actual profit, whichever is higher, is deducted. Now there is a demand to reduce this tax deduction to 35-40 per cent.
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