I am Tania Jaleel
On February 1, finance minister Nirmala Sitharaman will present the Union Budget 2021
There a lot of expectations from this budget from all quarters thanks to the effects of the novel coronavirus pandemic
EY India wrote for ET Online on personal finance expectations from this year’s budget
Here is a quick gist of what they had to say
Sonu Iyer of EY India says that the government could look at introducing a coronavirus cess or surcharge on individual tax payers – possibly only on the higher income groups
“I don’t foresee any change in the personal tax rates per se because the government has already introduced an alternative tax slab structure last year offering lower tax rates sans exemptions”, she said.
The government may also look at increasing the tax on long term capital gains from equity and property, to push up revenue, said Iyer.
The government could look at steps to increase consumption expenditure to boost the economy, she said.
These steps could include extension of the current LTC cash voucher scheme, or introduction of a variant of the same, incentives for the purchase of new vehicles among others.
The Rs 2 lakh cap on deduction that can be claimed on housing loan interest could also be increased to indirectly help the economy, she said.
The government may also look at providing further tax incentives to people to enable them to buy adequate health insurance which has gained importance following the current pandemic, she said.
Surabhi Marwah of EY India wrote that considering the present situation, the common man expects the Finance Minister to liberalise provisions of section 80D and expand its scope to include medical expenditure incurred by taxpayers on COVID-19 or any other ailment , without the restriction of age or availability of medical insurance.
Amarpal S. Chadha of EY India writes the Indian government could consider granting a deduction up to a specified limit, based on the spending or an additional standard deduction for all employees working from home.
With the union budget drawing close, it is not unreasonable for expectations to be high that an additional deduction/ exemption be allowed to employees to meet the expenses incurred while working from home.
EY India’s Shalini Jain says that the government needs more revenue to meet the cost of various relief measures to revive the economy hit by the COVID-19 pandemic, drive growth and invest in essential infrastructure.
However, many taxpayers have also been adversely impacted by the pandemic due to loss of jobs, shutdown of businesses, reduction in salary, increased medical costs etc.
Given this, it becomes necessary for the government to look at ways to increase its revenue without further adversely impacting the common taxpayer.
The FM definitely has her task cut out – this year is tougher than most
Feb 1 will be a day to watch out for
On that note that will be all for this week
Come back next week for more wealth wisdom