Budget 2021: In a bid to revive the COVID-19 battered economy and boost growth, Union Finance Minister Nirmala Sitharaman has promised a ‘never before’ like Union Budget this year. The Finance Minister has assured help to the sectors which are under stress due to the COVID-19 crisis. However, amid the pandemic, the middle-class common man or individual taxpayers were severely affected due to salary cuts and job losses. Tax experts and financial planners have come up with some suggestions for the government in order to provide relief to the common man through Budget 2021. (Also Read: COVID Cess, Increase Section 80C Limit: What Financial Planners Want From Budget 2021 )
According to research and advisory firm, Taxmann, the government may not announce any new tax deductions in the upcoming budget. The government has suffered a loss of revenue as industries have been impacted severely by COVID-19. Due to this, it is not likely that the government may increase the basic threshold limit or announce any new tax deduction in Budget 2021.
According to CA Aditya M Agarwal, Partner, Mahesh K Agarwal and Co., and Secretary, Professional Times, some expectations from Budget 2021 for the common man are as follows:
- Raise income tax slabs: The middle class expects the government to extend some tax benefits as a part of the relief for the impacted sector during the pandemic.
- Affordable housing loans, deduction in rent or EMI: The middle-class wants the government to allow an increased deduction for the interest on home loans from the taxable income. People also seek a reduction in EMI or rent.
- Savings boost for individuals: Increased limit under 80C and 80D by increasing the medical health insurance and med claim limits would encourage people towards an insured medical treatment
- Lower tax rates for MSME businesses will enable them to have a level playing with other assesses
- Reduced GST rates: The common man is looking for a reduction in GST rates in various sectors. The auto sector seeks a rate cut in automobiles from 28 per cent to 18 per cent.