Budget 2022: Key expectations of taxpayers from FM Sitharaman

That the Indian taxpayers were deeply impacted by the COVID-19 pandemic lockdowns is not news anymore. Moreover, moving forward, the taxpayer, in hopes of emerging out of the financial struggles, is expecting certain changes in the tax regime. 

Archit Gupta, founder and CEO of fintech SaaS platform Clear, rounds up what the Indian taxpayer is expecting from Finance Minister Nirmala Sitharaman in the Union Budget 2022-23. From revising personal income tax slabs to cryptocurrency taxation, here’s what Gupta says the taxpayer is expecting:

REVISING I-T SLABS

One of the key expectations of the taxpayers this season is the revision of the personal income tax slab. Many experts also say that the two regimes still confuse the common man, according to Gupta. “The government may consider increasing the highest tax slab to Rs 20 lakh from Rs 15 lakh or allow certain deductions to make the new regime more enticing. Budget 2021 did not provide any major relief to the salaried class,” he elaborated. 

WFH DEDUCTIONS

“The Budget 2022 may introduce tax-free work from home allowances for salaried employees. Allowing deductions for such expenses will raise the take-home salary, ultimately creating demand for goods and services in the country.

Due to the high direct tax collection this fiscal year, there may be a scope to increase tax deduction limits. For instance, the standard deduction available to those with salary income may be raised, currently at Rs 50,000. This may be adjusted for inflation every year,” he said.

HIGHER SECTION 80C, 80D LIMITS

Gupta said that taxpayers want Section 80C and Section 80D limits to be increased this year as they have been the same for long. “High direct tax collection during this fiscal year may help with upward revision of these limits. A higher deduction under Section 80C may be permitted for the Equity-Linked Savings Scheme (ELSS), or a separate limit can be defined to encourage more mutual fund investments in India,” he said.

The Clear founder also said that a special COVID expense-related deduction is also expected under Section 80D or 80DDB, in order to provide relief to COVID-19 patients and their families. 

CRYPTOCURRENCY TAXATION

While the much-awaited cryptocurrency bill is still in the works, some sort of clarity is expected on the taxation of cryptocurrency this Budget. “There are various concerns about the taxation of crypto, its classification, applicable tax rates, TDS/TCS and GST implications on the sale and purchase of cryptocurrencies, etc. which we are hoping will be clarified during the budget session,” explained Gupta.

Also read: Budget 2022: Will the salaried class get income tax relief this year?

Also read: Budget 2022: Here's what the middle class expects from FM Sitharaman