Union Budget 2022: Increase in Income Tax slab vital for salaried class

What perhaps needed in the Union Budget 2022 is to bring dynamic changes in the income-tax slabs and increase the rebates under section 80C, 80EE, 80EEA and 24(b) of the Income Tax Act, say experts.

New Delhi: As Finance Minister Nirmala Sitharaman is all set to present the Union Budget 2022 on February 1, salaried class is highly anticipating an increase in the income tax limit which has not been increased in the last couple of years.

"In order to provide relief to the taxpayers, the Government could consider introducing reforms to expand ELSS category savings to include fixed incomes, rather than just equity schemes to provide investors with more choice. We are also looking forward to the FM's views on capital gains tax to simplify and bring uniformity in the structure," said  Saurav Basu, Head of Wealth Management at Tata Capital.

Deepak Shenoy, CFO, Wolken Software said, "For employees, WFH allowance to become tax-free, increase in the standard deduction, and increased tax benefits on housing loans for interest payment and principal repayment will generate some relief in these distressing times."

“Coming to tax benefit, repayment of principal amount in a home-loan qualifies for deduction under section 80C, which has an upper limit of Rs 1.50 lakh per annum. Since the same section - 80C, accounts a number of other investments including PF, PPF and life insurance policies etc, it becomes impossible for a buyer to take advantage of any benefit out of this section,” IANS, quoting Pankaj Bansal is Director - M3M India Pvt Limited wrote.

On the tax benefit for interest payment, since under section 20(b) of the Income Tax Act, there is a cap of Rs 2 lakh per annum on the interest part of the home-loan, home-loans being larger in size, the buyers are unable to take much benefit of the same too. To extend tax benefit to the buyers the government has also added few sub-sections 80EE, 80EEA under the Income Tax Act but the volume of loan is not allowing buyers to gain desired additional benefits out of these sub-sections.

What perhaps needed in the Union Budget 2022 is to bring dynamic changes in the income-tax slabs and increase the rebates under section 80C, 80EE, 80EEA and 24(b) of the Income Tax Act.