New Delhi: Union Finance Minister Nirmala Sitharaman is all set to present her fourth Budget for the fiscal year 2022-23 on February 1.
Interestingly, this will be the 10th budget of the Modi government.
Notably, in the last budget, the government didn't change the tax slab. In such a scenario it is expected that this time the government take steps to change the tax slab. Apart from this, according to several media reports, relief packages can be announced for sectors like health, infrastructure, real estate, defence, hospitality and MSME sectors in the wake of COVID-19.
Let's have a look at the expectation of the sectors one by one to understand in depth.
As always, salaried people have high hopes this time from the Budget 2022. In fact, for them at present, the amount of standard deduction under section 16 is fixed at Rs 50,000. For a long time, there has been a demand to increase this to Rs 1 lakh. Ahead of the budget, salaried people are expecting it to be increased. If the same is increased by the government, the salaried people will be directly benefited from the tax.
Every employee like you and me have once worked from home or still working from home due to COVID-19, in such a scenario their expenditure on electricity, internet charges, rent, furniture, etc. has increased following which the Institute of Chartered Accountants of India (ICAI) has also suggested giving additional tax exemption to those working from home.
Due to COVID-19, there has been a lot of focus on the health sector in the last two years. From Budget 2022, it is expected that life insurance may be taken out of section 80C of the Income Tax Act. Both life insurance and medical insurance can be clubbed under the new category or the 80C limit can be increased overall which will eventually benefit taxpayers.
The government's emphasis in the budget is expected to be on the taxpayers of the country as no new announcement has been made for the taxpayers in the last several budgets. Reportedly, taxpayers are expecting to reduce the GST on insurance / mediclaim premium in this budget.
Non-banking financial companies (NBFCs) and online lending companies (fintech) are expected to get tax relief in the budget this year. Companies are of the view that to increase liquidity inflows, low-cost funding for NBFCs operating in the retail sector as well as exemptions on GST and TDS should be introduced in the budget.
Notably, the domestic automobile sector is passing through the worst phase of the last two decades. The contribution of the automobile sector to the total GDP of the country is 7.5 percent, while it, directly and indirectly, employs 10 lakh people. Incentives are also needed to make the sector ready for new investments. There is also a demand to implement the system of levying a uniform tax, especially in the automobile sector.
According to experts, the economy has shown great growth during the financial year 2021-22 and the country is again on the path of growth. If the government maintains the reforms, it will accelerate the recovery in 2022 as well and maintain the tempo of the economy booster. Startup activities and the government's relief package will boost Ease of Doing Business (EoDB) in India.
According to reports, this year's Union Budget may play a supporting role in the real estate sector by offering some major exemptions in tax and waiver, reduction in GST on raw material. As this sector is one of the largest contributors to the country's Gross Domestic Product (GDP), strengthening this sector will also boost allied economic activities, leading to a positive change in the economy as a whole.
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