- Advertisement -
HomePersonal FinanceUnion Budget 2023: What the common man wants from Nirmala Sitharaman?

Union Budget 2023: What the common man wants from Nirmala Sitharaman?

- Advertisement -
- Advertisement -

In 2019, Nirmala Sitharaman defied the age-old tradition of bringing the budget in a briefcase. She brought the budget documents covered in a red-velvet cloth, known as Bahikhata. The move garnered huge attention as it did away with the English tradition of presenting the budget in a briefcase.


As we near the release of Budget 2023, being the last full-fledged budget of the Modi government before the 2024 elections, there are high expectations of a common man from the government to increase the disposable income. The Indian economy, having been hit from the last couple of years on account of the Covid pandemic, followed by the Ukraine war and its consequent effect of inflation, has slowly started recovering, which has arisen the hopes of the common man We discuss below some common expectations from the upcoming budget for different category of taxpayers:

General:

  • An increase in the basic exemption limit from INR 2,50,000 which has remained unchanged since 2014-15 when the Modi Government came into power. An increase up to INR 300,000 will surely help in absorbing some part of the inflation and putting more money in the pockets of the people.
  • Limit of deduction on few eligible investments and expenditure is currently capped at INR 150,000 under section 80C of the Income Tax Act, 1961 (‘the Act’). The limit was last enhanced in the year 2014-15 prior to which it was INR 100,000. The Government may consider increasing the same to INR 250,000 which will encourage the people to invest more and help boost economic growth.
  • The New Personal Tax Regime (“NPTR”) introduced effective April 1, 2020, has not gained much popularity, and needs to be revamped. The Government may consider allowing certain specified deductions such as deduction under section 80C etc. under this regime also. Presently, NPTR is not considered favorable where the taxable income exceeds INR 15 lacs. The Government may consider revamping the slabs to make it more beneficial for the individuals.
  • The exemption for the interest paid on housing loan for self-occupied property is currently capped at INR 2,00,000, provided the acquisition/construction is completed within 5 years. Considering many housing projects are getting delayed due to covid pandemic, such completion period may be increased to 7 years to provide relief to home buyers and give a positive signal to the real estate world. The current capping of deduction in respect of interest on loan may also be increased to INR 300,000 lacs to account for increase in the interest rates.

Salaried class:

  • Considering that the salaried employees primarily shoulder India’s individual tax revenue as they pay comparatively a higher percentage of taxes which are deducted at source, they should also be eligible for more respite such as: The standard deduction allowed under the old tax regime is currently INR 50,000. This deduction was introduced to absorb the medical and transport allowance, both of which have had a steep rise on account of the pandemic and high cost of fuel on account of the global turbulence. To take care of these twin effects, the Government may consider increasing the deduction to INR 75,000.
  • Salaried class receives certain allowances such as Children Education Allowance, Hostel Expenditure Allowance, etc. which are capped at INR 100 per month per child and INR 300 per month per child, respectively for up to 2 children. These limits have not been updated since decades and are much lower as compared to the actual costs. Such limit of allowances can be rationalized to align to the current costs to some extent and may be increased to INR 3,000 per month for children education allowance and INR 6,000 per month for hostel expenditure allowance.
  • Pandemic has made a lot of employers follow a work from home culture. This has increased costs for employees such as electricity, internet, mobile expenses etc. A tax-free allowance in respect of work from home up to INR 6,000 per month may be introduced to cover such additional costs.
  • Leave Travel Allowance currently allowed for a block of four calendar years may be extended to every year and allowed to cover foreign travel expenses as well, in addition to the travel within India as eligible currently. This will provide extended benefits to the taxpayers as they can claim it frequently and use the benefit irrespective of the timing and destination they wish to travel during their leave.

Female:

  • The female taxpayers were given an additional tax slab exemption till tax year 2011-12. The Government may consider enhancing the basic exemption limit by INR 50,000 for them.
  • Presently, interest in respect of higher education loan is eligible to be claimed as a deduction spanning over a period of 8 years under section 80E of the Act. To encourage higher education of the girl child, to the Government may consider extending the cap of 8 years to at least 12 years.
  • In view of increasing trend of nuclear families and both the parents working, there is also an expectation to provide tax relief of at least an amount up to INR 6,000 per month to cover crèche facility expenses.

Senior Citizen:

  • Currently, the basic exemption limit for the senior citizen group (resident below 80 years of age) is INR 300,000. The Government may consider enhancing such limit to INR 350,000 to cover the increased inflation cost
  • The present limit of Section 80TTB of the Act, deduction of INR 50,000 for interest on bank deposits/post office deposits may be increased to INR 75,000 including the interest on NSCs.
  • Further, considering the medical costs have spiraled over the year, the government may consider increasing the limit of INR 100,000 under Section 80DDB which covers medical expenditure incurred for specified diseases such as malignant cancer etc., to atleast INR 200,000 to cover the actual expenses to some extent.
  • The expectation of taxpayers are many folds. It would be interesting to see how the Government meets the hopes of populist budget, at the same time ensuring fiscal prudence. Any increase in the disposable income in the hands of the common man would lead to higher consumption and promote economic recovery and investments.

Pravesh Maurya
Pravesh Maurya
Pravesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ businessleaguein@gmail.com
RELATED ARTICLES

Most Popular

Recent Comments