Due to Corona infection, the economy has been severely affected. The government’s income from direct and these direct taxes has decreased. In such a situation, can the government extend the list of tax exemption?
With a view to encourage a new alternative income tax regime introduced in the previous budget, the government has proposed to further expand the list of eligible exemptions and exemptions to allow some more categories of financial savings instruments for taxpayers. This is also because there is a demand from every section that tax should be reduced to a minimum and it should be exempted.
Government is in favor of reducing tax burden
According to the report published in the Indian Express, in the discussion of the Union Budget 2021, the most said thing is that the government is in favor of reducing the tax burden to further increase the demand by ensuring disposable income. The two officials involved in the exercise said that the aim is to encourage a new tax regime through tax proposals instead of making any major changes in the earlier income tax slabs “A government official also told The Indian Express that,” The new income tax system has not chosen that method as anticipated. Therefore, the new income tax option is being considered to include more exemptions like provident fund. ”
Many discounts are in demand
Explain that in many representations being done before the budget, there is a demand that the holiday travel concession cash voucher scheme be extended. Along with this, all taxpayers should get the extension of benefits from medical expenditure. At the same time, the interest rate limit for home loans and for the first time home buyers should also be tax concession. According to sources, however, the government is also willing to give more benefits under the new system. Therefore, priority and encouragement can be given to the new tax system.
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New concessional income tax system was announced last year.
It is worth noting that while presenting the Union Budget for 2020-21 in February last year, Finance Minister Nirmala Sitharaman announced a new concessional income tax regime, which introduced lower tax rates. Under the new system, a person has to pay 10 percent tax for income between Rs 5 lakh and 7.5 lakh, and 15 percent for income between Rs 7.5 lakh and 10 lakh, Rs 10 lakh. There is a 20 percent tax on income between Rs 12.5 lakh and 25 percent tax for income between Rs 12.5 lakh and Rs 15 lakh as against the current rate of 30 percent for each of these categories. At the same time, income of more than 15 lakh rupees has been taxed at the rate of 30 percent in both the systems.
How much expectation for rebounding economy due to Corona?
Significantly, the Union of 2021-22 will be presented on February 1. Let us tell you that due to Corona infection, the economy has been affected quite badly. The government’s income from direct and these direct taxes has decreased. In such a situation, will it be possible for the government to give tax exemption. However, there are reports that the Finance Ministry is considering a demand to increase the exemption limit under section 80C.
Discount can be increased under 80C
The government may increase the exemption provided under section 80C from Rs 1.5 lakh to Rs 2 lakh in the budget presented on 1 February. The government can also increase the tax deduction limit on the payment of both interest and principal money of the home loan in the budget.
