Finance Minister Nirmala Sitharaman is scheduled to present the budget next week. Amidst the Corona crisis, this time budget has high expectations from the industry. According to sources, the Finance Minister is preparing to increase the tax exemption limit in the income tax streams to bring more money in the hands of taxpayers.
According to Finance Ministry sources, the Finance Minister can also give benefit of tax exemption under donation (donation) in the new tax system. Also, the standard deduction limit can be increased from Rs 50 thousand to Rs 80 thousand. Not only this, under the 80C, it is also being considered to increase the scope of exemption of 50 thousand rupees through investment. According to the information received by Hindustan through sources, the finance minister can give the benefit of tax exemption under 80G in the new tax system. The government can take these steps in the budget to promote donation for national and social reasons.
Discussion on increasing tax exemption in new system
Last year, a slab with low tax rates for taxpayers was announced as an option in the budget, but most deductions including 80G were abolished in this system. During the budget meetings, this proposal was discussed that deduction under 80G should be restored in the new tax system. Under this, there can be a provision of 100 tax rebate in PM National Relief Fund and PM Cares, 50 percent rebate on donations in a socio-religious charitable institution.
Relief possible even in standard deduction
Apart from this, the central government can increase the exemption limit of Rs 50 thousand under standard deduction to Rs 80 thousand. It is the amount that is calculated for tax after deducting the income from the tax net of a person. Removing this amount directly reduces taxable income.
Government’s emphasis on increasing savings
The government may also expand the scope of 80C to boost investment in the budget. In the current era, under this, one and a half lakh rupees get the benefit from the government, it can be increased to two lakh rupees.
Relief is possible for employees working from home
Experts say that the government may consider giving tax benefits to employees working from home in the upcoming budget. This step will help in increasing the demand in the market. Significantly, after corona, the culture of work from home has increased rapidly. In view of this, the government can give relief.