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Few days are left for presenting budget in Parliament by Finance Minister Smt. Nirmala Sitaraman. This will be her 5th consecutive full budget, during Bhartiya Janta Party’s tenure of 9 years. Since 2014, Bhartiya Janta Party came in to power, 4 budgets were presented by Late Shri Arun Jetly, one supplementary budget by Piyush Goyal.

We know that preparation of budget starts since, August/September, by this time most of the data are ready, though what the people expect from this budget 2023 are covered or not, that is important. Every year people expect something and came other thing. Any way let’s see the expectations of the tax payer.

Expectation of Senior Citizen:

They may get exemption from filling return of income. At present the exemption from filling return of income up to income of Rs. 3,00,000 for the person above 60 years and Rs. 5,00,000 for the person above 80 years. Normally the source of income for these senior citizens are interest and pension, who were salaried person. It is expected that the limit of Rs. 3,00,000 may be raised to Rs. 7,50,000 for aged above 60 years, limit of Rs. 5,00,000 may be raised to 12.50,000 for aged above 80 years.

Change in Slabs of Tax:

Since financial year 2015-16, income tax exemption limit was Rs. 2,50,000 which should be change. Last before one year they have given option to tax payers to select any one slab as per their choice, but the experience shows that most of the tax payers have chosen the old slab, because the new slab was not that much attractive nor beneficial to the tax payers. The new tax slab may be as under:

Up to Rs. 3,00,000 No Tax
Rs. 3,00,001 to Rs. 7,50,000 10%
Rs. 7,50,001 to Rs. 15,00,000 20%
Rs.15,00,001 and above 30%

Rate of tax on Firms and LLPs should be reduce, and make it equal to Corporate entities. This difference should not be there, as both are doing business.  

Interest on loan for house:

In case of Income from House Property, interest paid for loan taken to purchase house, construction of house or repairing of house is restricted to Rs. 2,00,000 as deduction. Looking to the present situation it should be increased to Rs. 5,00,000

Expectations of Tax Payers In Budget – 2023

Deduction from Salary:

Separate deduction was not allowed in respect of expenditure on books, expenditure on travelling for the purpose of employment and expenditure incidental to employment, instead, a standard deduction which was NIL since 2006-07 was allowable up to Rs. 40,000 since 2018-19 which increased to Rs.50,000 form 2019-20. Looking to the standard of Salary given to an employee, deduction of Rs.50,000 is very law, which should be increased to Rs. 1,00,000 per year. At present the rate of inflation and purchasing power of the salaried individual the amount of Rs. 1,00,000 is also a small amount. 

Deductions of Chapter VI A:

This is the most important chapter, which covers the deductions from Gross Total Income. Under this chapter Sections 80C to 80U specifies the deductions to be made from Gross total Income, that means total income from all the five heads of Total income. Under section 80C pertaining to Life Insurance Premium, contribution to provident Fund, Public Provident Fund, Unit Linked Insurance plan, LIC Mutual Fund, Tuition Fees of children, notified scheme of term deposit for a fix period of 5 years with schedule bank etc. Though the items for deduction are much more, the amount of deduction is only Rs. 1,50,000 which is too small. Now a days only the fees of children for education are very high, that amount of Rs. 1,50,000 is negligible. In fact since long there is a need for increase the amount of deduction, but finance department is not hearing anything. In fact it should be Rs. 1,50,000 only for fees and another deduction of Rs. 3,00,00 should be for rest of investments.

Advance Payment of Tax:

Since the year 2012-13, limit of payment of advance tax is Rs. 10,000 that means if total tax payable increase to Rs. 10,000 advance tax is to be paid in four instalments. This limit Rs.10,000 should increase to Rs.50,000, so that aseessee as well as department can save the time for calculation of collection of tax every quarter.

Rate of Tax Deducted at Source:

Non Resident Indians have deposit in their NRO bank account and they get interest thereon. The question is that why TDS is to be done @30 instead of 10% on Indian Residents. TDS rate of 30% is to be reduced so that NRI can deposit more and more fund in their NRO account with Banks. It is also propose that there should be scheme of investment for NRI at various rate of interest like Indian Residents, so that they can invest more fund in our country.

In case of labor payment for one transection limit is Rs. 30,000 and for more than one it is Rs.1,00,000 which now a days is too low, which may increase up to Rs. 50,000 and Rs. 1,50,000

In case of sale of immovable property, if the amount transection exceed Rs. 50,00,000 TCS is to made by the 1%. Looking to the present situation this limit is to be exceed.

Rate of Interest on Refund:

At the time of issue of refund order, if the interest is to be paid to assesse, the rate of interest is 6% while assesse has to pay interest on difference of tax paid and payable is @ 12%. Why there is discrimination in levy of interest and payment of interest. This should be equal, so they have to give interest @12% on refund amount.

Income of Minor Children:

As per section 10(32) the income of a minor child is clubbed in the income of the parents, whose income is higher. In such situation deduction of only Rs. 1,500 per child is allowable. This limit is to be increase from Rs. 1,500 to Rs.15,000 for each child.

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