Budget 2022: Salaried class expects revision in tax slab, section 80C limit

India’s salaried class is
expecting from the Union Budget 2022-23 some announcements that will provide
much-needed relief. This year, income tax-payers have a long list of
expectations from finance minister Nirmala Sitharaman as no relief was announced
for the salaried class in the previous year’s budget.

According
to a pre-Budget survey by KPMG, most individual taxpayers expect an enhancement
in the basic income tax exemption limit of Rs 2.5 lakh. They also sought an
upward revision in the top income slab of Rs 10 lakh and above and an increase
in the existing section 80C deduction limit of Rs 1.5 lakh.

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According
to the survey, 36% of respondents want the government to enhance the 80C
deduction limit of Rs 1.5 lakh while 29% expect the income tax limit of Rs 10
lakh at which the maximum marginal rate of 30% tax is triggerd to be enhanced.
In all, 19% of respondents are hoping for an increase in the standard deduction
limit of Rs 50,000 for the salaried classes.

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Rajiv Dimri, National Head of Tax
of KPMG India, said individual taxpayers are anticipating an enhancement limit
of Rs 2.5 lakh. Respondents are also seeking an upward revision in the top
income slab of Rs 10 lakh and an increase in the existing 80C deduction limit
of Rs 1.5 lakh.

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Over
the past few years, the government has taken several measures to resolve tax
disputes and overhaul the  resolution framework. Further measures in this
direction can help in reducing litigation. Rationalisation of TDS and TCS
provisions to ease compliance burdens will also be welcomed, added Dimri.

The
Confederation of Indian Industry (CII) urged the government to raise the salary
cap of Rs 1 lakh per month to avail benefits under Section 80JJAA of the Income
Tax Act.

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On
the other hand, 16% of these respondents are looking forward to tax-free
allowances and perquisites for salaried individuals considering the work from
home arrangement (provision of internet connection/furniture/earphones/etc).

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Raj
Khosla, founder, and MD of fintech firm MyMoneyMantra.com, said many companies
provide laptops, computers and furniture to employees to work from home. Some
firms pay a fixed allowance to employees to bear the cost of remote working.
The budget should clarify how these costs are to be accounted for by companies
as well as provide some relief for such allowances to employees. Such payments
should be exempt from tax in the hands of employees if supported by actual
bills.

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Income
tax-payers demand an enhanced tax limit because there has been a sharp rise in
inflation and household expenses such as electricity and medical expenses.

Consumers and salaried employees
are also expecting some tax-related benefits.