FM Madam, Please increase Standard Deduction for Salaried Class
The Budget 2022 is shortly to be presented in the Parliament. Trade, Business & Industries Associations, Chambers & Federations have submitted their suggestions, demands & expectations from the Budget 2022. All business entities are demanding more exemptions/ deductions from their taxable income, raising of the basic limit and reduction in tax rates.
The salaried persons perhaps have no say in the Budget. Businesses and the self employed manage their taxable incomes but the salaried class cannot escape the clutches of the Income Tax Department because the employer is mandated for deducting tax at source. The salaried do not get any preferential tax rates or any special concessions except a deduction of the Standard Deduction u/s 16(ia) of the Income Tax Act. The deduction too is meagre @ Rs. 50000/- for the current assessment year. On top of it, the standard deduction is allowable only under the old tax regime. If a salaried person opts for the new tax regime, he/she is not entitled to any standard deduction. Thus, the very mandate/ purpose of this benevolent deduction is nullified/crucified.
Our present Government is committed to Honesty and is endeavouring minimum interaction with assessees/ general public with the introduction of faceless assessment & appeals. In order to promote honesty, the government has to increase the take home salary. So either increase the overall salary or to increase the Standard Deduction so as to reduce the incidence of Income Tax. I feel the second option is a just & reasonable option. It should be increased to atleast Rs. 1,20,000/- per annum from the coming Financial Year.
Alternatively, there should be 2 different rates of Individual Income Tax for salaried & non- salaried class. There appears no rationale in having similar Income Tax rates for these two altogether different classes. This will enable higher take away salaries and foster Honesty & Dedication in their work.
Madam FM is requested to give the salaried Tax-Payer’s a reason to smile by increasing the Standard Deduction or in the alternative give two different rates of Income Tax- lower for the salaried & higher for the non- salaried class.
Author Bio
As a individual corporate tax payer and a middle class income in the metro cities, our taxes are being deducted in lakhs apart from GST in % if we purchase anything..
1. Finally we held up in arranging amount for kids studies and their requirements. (which could be only part of our taxes10-20%)
2. Secondly, now we are earning and paying taxes in lakhs from the salary.. but, atleast some % of return we expect based on IT tax amount we had paid when we get retirement.
We are happy to align to Govt Tax system by paying taxes.. we expect monthly returns during retirement based on the tax amount accumulated from individual PAN.