For the salaried category, the epidemic year has been challenging. Many persons have destroyed their jobs because of the economic turmoil created by the lockdown and many endured wage cuts. Over the last nine months, homework has also been taking a mental strain on individuals. Although relief initiatives have been provided for the needy, the affected sectors, the small and medium-sized enterprises, in addition to the loan moratorium, no meaningful steps have been declared for the salaried category. To get relief, the salaried public seeks tax cuts and/or reduction of slab rates. That being said, considering the limitations of a pandemic year, the need for vaccination support and the effect on the fiscal deficit, the hands of the government are tied up. There are several hopes of the salaried class from the budget, including the following:
Raise the limit on interest on housing loans
Presently, there is a limit of Rs 2 lakh on the allowance for housing loan interest. The bulk of Mumbai’s unpurchased apartments cost over Rs 1 crore. An apartment costing Rs 1 crore, with a loan of Rs 80 lakh for a 20-year term, results in an accrued interest of Rs 5 lakh per year. City wise limits could be imposed to increase the ceiling on interest on housing loans. It is necessary to raise the limit to Rs 5 lakh. It will also support the real estate market, which is currently facing a decline, with a much needed lift.
Raise limit on investments
For investments under Sec. 80C, there is a limit of Rs 1.5 lakh. This tax contribution cap prevents more savings. It is necessary to almost double this deduction cap to Rs 3 lakh. Relevant infrastructure bonds must be introduced by the government and subscriptions up to Rs 1.5 lakh could be permitted as a tax benefit. It will offer much-needed funding for state finances at a time when government collections have dropped behind expectations due to lockdowns. Infrastructure investment will also help in work growth and have positive effects on the growth.
Consider house sales as equity sales
Selling a house after 3 years of ownership usually needs the same rate of taxes as one’s existing tax slab. When the estate has been sold for more than three years, no tax is owed if and only if the purchaser reinvests the capital in the estate again. In the case of equity, on securities held for more than one year, long-term capital gains tax is 10% . For residential land, the same law should apply. If this were achieved, with a greater discovery of rates, the property market will become a much stronger traded market.
Raise the minimum or standard deduction
To put salaried people on equality with employees and companies, Standard Deduction was initiated. All costs accrued when earning profits can be claimed by professionals and companies as a benefit from it. On this net income, taxes are estimated. While receiving his income, a salaried taxpayer often incurs expenses-conveyance, driver’s allowance (if applicable), food and refreshments, clothes, stationery, and so on. A standard deduction of up to Rs 50,000 per annum is currently permissible. This should be multiplied to Rs 1 lakh per annum considering the pandemic, loss of jobs, decline in wages, rise in expenditures while working from home.
Set up a Corona incentive
For the next fiscal year, an uniform corona rebate of Rs 50,000 should be approved for salaried individuals. This discount will be deductible from the gross tax due. This will reduce the burden for taxation and provide citizens with support.
Unique aid to persons who have lost employment or who experienced salary cuts
Banks should be advised by the Ministry of Finance to raise the tenure of loans to salaried individuals who have undergone wage cuts. The loans should be revamped with the individual’s current salary and benefits in view. For individuals that have quit their employment after the pandemic and are not reemployed by April 1, 2021, a loan and tax moratorium of one year must be announced.
Render tax deductible interest on vehicle loans
Just as interest and principal payments on home loans are tax deductible with limits, service on vehicular loans should be enforced. This will improve the automobile sector’s drooping prospects as well as raise the take-home of salaried individuals. To sum it all up, in these difficult days, the salaried class who are decent taxpayers need the government’s support. Assume you’re referring to the finance minister.
