INSUBCONTINENT EXCLUSIVE:
Individual taxpayers have higher expectations from Budget 2022 in terms of rationalisation of provisions.The Covid-19 pandemic has led to a
dramatic loss of human life worldwide and poses an unprecedent challenge to public health, employment and economic progress
Policymakers have a tough task on their hand to bring the economy back on track and start building a future of work that is safer and more
contribute almost 35-40% of direct tax revenues, have higher expectations from Budget 2022 in terms of rationalisation of provisions, ease
Increase threshold under eligible investments to claim deduction: Currently, deduction to the extent of Rs 150,000 on investments made in
eligible categories are allowed
mutual funds, equity shares or debentures, expense as tuition fees, etc
Revision of threshold to tax interest income on Provident Fund: The preceding budget introduced to tax interest arising on PF contributions
made that is upwards of Rs 250,000 a year (in case of employer contribution)
To encourage social security savings, it would be a fair ask to up the thresholds to Rs 400,00 a year.3
Clarity on Crypto taxation: Considering cryptocurrency as an investment medium has gained huge traction in India, it is essential that the
Budget clarifies the ambiguity regarding taxation of crypto and clearly spells out the provisions relating to new age investments or
carrying-out business transactions
This will provide the much-needed clarity to millions of investors/businesses in India and may also pave the way for new-age technological
advancements in the country.4
Changes to be made to the new tax regime under Section 115BAC: It is undeniable that the government has provided significantly slashed tax
slab rates under the new regime
government amends provisions to include one/few of these major exemptions/deductions, evaluating whether providing even one significant
incentive to such individuals opting for the new tax regime is substantiable
This would attract a big part of the salaried demography into the tax paying initiative.5
set off against other heads of income (such as salary, capital gains, professional income or income from other sources) up to Rs 200,000
Further, any carried forward loss cannot be set off in subsequent years against other heads of income except the income from house property
This results into lapse of such carried forward losses due to higher interest payment in subsequent years as well
Hence, the government should increase the maximum limit of such deduction from Rs 200,000 to Rs 350,000 per annum.Further, the existing
provisions don't allow the deduction of maintenance charges paid to society etc
It is recommended to insert a new provision to allow such deduction against the rental income earned so that only real income is taxed in
New category of deduction towards work from home (WFH): It's been a continuous ask from employee's working from home incurring expenses for
setting-up a home office space to be eligible for a WFH deduction of Rs 50,000 annually irrespective of tax regime opted
Just to give perspective, the UK government has provided a flat rate of GBP 6 per week of tax relief towards additional household cost to
people WFH.Budget 2022 has managed to grab every person's attention as there aren't any wrought-down, concrete changes that is expected for
the common man and it is mostly a guessing game at this point
It will be exciting to see the changes that will be presented this time.(Disclaimer: These are the personal opinions of the author.)
