By CA Yamini Gujar, Financial Advisor
Taxpayers are expected to get a lot of concession from the 2023 budget. It is expected that the government will increase the income tax limit. According to the Income Tax Department, about 50 percent of the Income Tax Return (ITR) filed in 2022 was filled by the salaried class.
Therefore, such taxpayers are hopeful that the government will take further steps in their interest.
Due to rising inflation, there has been an increase in the cost of living. In such a situation, taxpayers are expecting an increase in the income exemption limit of Rs 2.5 lakh to Rs.5 lakh rupees under the new tax system.
Under Section 16 (ia) of Income Tax, the salaried class gets exemption every year under the standard deduction limit of Rs 50,000. The salaried class is also expecting an increase in this. He is hopeful that the government may increase the standard deduction limit from Rs 50,000 to Rs 75,000.
Taxpayers get a deduction of Rs 1.5 lakh on investment every year under Section 80C of Income Tax. Taxpayers are demanding to increase this limit. If the government takes a decision on this in the budget, then taxpayers will get a big relief. Saving options like PPF, ELSS, NSC, NPS, Bank FD come under this.
If taxpayer invests in any special pension scheme of the Central Government (for Insurance, National Pension Scheme, Atal Pension Scheme). So, apart from section 80C, he/she can claim a further deduction of Rs 50,000 under section 80CCD(1B) of income tax.
The deduction limit under section 80C is Rs 150000. Budget 2023 is expected to increase the deduction limit under section 80CCD(1B) from Rs 50,000 to Rs 100,000 annually to encourage investment in retirement plans.
A salaried taxpayer gets a variety of allowances along with his ‘salary’. Children’s Education Allowance of Rs. 100 per month per child and Children’s Hostel Expenditure Allowance of Rs. 300 per month is available in the employee’s salary.
This type of allowance has not been revised by the government for more than 20 years. It is expected that in view of inflation in this budget, a decision can be taken to increase the amount of allowance.
