Budget 2022: Taxpayers hope for a hike in tax rebate, standard deduction limits

Taxpayers are hoping that the finance minister will increase the cap on tax rebate, besides offering other measures to provide a sigh of relief to the common man.

New Delhi: Finance Minister Nirmala Sitharaman is all set to present the Union Budget 2022-23 at 11 am, today (February 1, 2022). With Budget 2022, taxpayers are hoping that the finance minister will increase the cap on tax rebate, besides offering other measures at a time when the Covid-19 pandemic has affected personal incomes. 

Taxpayers are hoping that the government increases the deduction under Section 80C of the Income Tax Act. Currently, individual investors can file for a rebate of up to Rs 1.5 lakh under 80C. 

Taxpayers are expecting the government to hike the basic exemption limit from Rs 2.5 lakh to Rs 3 lakh. As of now, the basic exemption limit under the Income Tax Act, 1961, remains Rs 2.5 lakh. The government hasn’t increased the tax slab for several years. 

Taxpayers are demanding a hike of the basic exemption limit to Rs 3 lakh due to the rising inflation and the increased cost of living in the years that have gone by since the last revision. 

Another request of taxpayers to the government is to increase the standard deduction from the Rs 50,000 cap to Rs 75,000 to provide a sigh of relief at a time when inflation remains on the higher side. Also Read: Union Budget 2022 Live updates: All eyes on FM Nirmala Sitharaman as she presents her 4th straight Budget today

Moreover, the government could offer additional tax incentives related to affordable housing. “On the revenue front, gross tax/GDP ratio is expected to increase to 10.7 per cent amid healthy tax buoyancy across segments. Though we do not see any major changes in taxes, we do not rule out minor tinkering in the form of higher standard deduction for salaried taxpayers; tax incentives related to affordable housing; or marginally higher customs duties on PLI-related finished/semi-finished products. Separately, lower non-tax revenue will be led by lower RBI dividends,” Emkay Global Financial Services had said in a report. Also Read: Budget 2022 live streaming: When and where to watch FM Sitharaman’s Lok Sabha speech