Union budget 2021-22 – The budget 2021-22 would be an important event for the common man. Budget will be presented in the parliamentary session on 1st Feb, 2021.
This year Indian economy is going towards a recession phase due to COVID-19 crisis. Although tax collection is very low in the year 2020, common man is expecting major relief with respect to Income Tax and all other financial fronts. Additionally, common man also wants employment generation and more earning opportunities.
The government has collected suggestions of the common man online on MyGov Portal. The suggestion submitted by common man online the portal would be presented in the upcoming parliament session. This means opinion of common man would count in union budget 2021-22. I have complied suggestion by the common man in this post.
Budget 2021-22 – Expectations of Common man
Income Tax Related Expectations
As of now standard deduction limit is Rs.50000. Suggestion is made to increase this standard deduction limit from Rs.50000 to 1 Lakh.
Investment made up to 1.5 Lakh under section 80 C can be claimed for income tax deduction. The suggestion is given to increase this limit from 1.5 Lakh to 1.9 Lakh or 3 Lakh.
Under section 24 Home loan interest up to 2 Lakh is allowed for deduction. It is recommended to increase this limit by 1 Lakh. This means section 24 for home loan should give benefit of 3 Lakh.
Electrical Vehicle Loan Interest rate exemption should be increased to 3 Lakh. This limit can be applied to all four wheeler purchase using loan.
Leave encashment limit as of now is 3 lakhs it is expected by the salaried people that this limit should be enhanced to 5 lakhs.
For health care workers and doctors specialized tax benefit can be announced. For health insurance income tax exemption under section 80D is Rs.25000 that can be enhanced to Rs.50000 and for senior citizen this limit can be enhanced to Rs.75000.
The government should impose additional tax on super rich. This tax can be in form of Covid relief cess. One suggestion could be that person with income above 20 lakhs needs to pay 1% Covid relief cess.
Insurance Related Expectations
People have realized benefits of Health Insurance and life insurance in the year. The government is offering benefits of life insurance premium and health insurance premium under section 80C and 80D. But, to boost overall economy the government should extend additional benefits to crop insurance taken by farmer.
Cyber security is also popping up as new risk. To mitigate this new cyber risk, the government should provide some tax relaxations and incentives.
On the indirect tax front, the government can reduce GST rate applicable on insurance premium. This is to boost insurance sector.
Equity and mutual fund related Expectations
As of now on sell of shares (equity) long term capital gain tax and short term capital gain tax is applicable. Common man is expecting reduction or removal in the LTCG and STCG but it is expected that the government shall increase short term capital gain tax from 15% to 20%.
For the mutual funds common man is expecting that dividend income which is currently added to income and taxed as per income tax should be relooked into. The government should remove this clause.
At last I just want to say at time of election when politicians require vote they listen to every demand of people. But when time comes fulfilling it in budget, they simply refuse demand of common man by giving multiple excuse like fiscal deficit, economy etc.
Hope this year in Budget 2021 at least few demands mentioned above will be fulfilled by government.
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