Budget 2022: Five areas for some relief to households
Here are some areas where this is possible.
1. Basic exemption limit
Last revised in 2014-15
Rs 2.5 lakh All individual taxpayers
Rs 3 lakh Individuals 60-80 years old
Rs 5 lakh Individuals over 80
Raising this limit will provide relief and reduce the burden of filing tax returns in the system.
2. REVISION OF INCOME TAX PLATES
The highest income rate starts at a low Rs 10 lakh
Case of adjustment in view of high inflation
The new regime can be made more attractive to encourage migration
3. INCENTIVES FOR FINANCIAL SAVINGS
The Section 80C limit has not been reviewed for many years and includes non-savings items such as tuition fees and home loan principal repayments
Current limit Rs 1.5 lakh
There is room to increase given the steady decline in the savings rate
4. INTEREST DISCOUNT ON HOUSING LOANS
Not reviewed for many years even as average home prices have risen
Interest repayment Rs 2 lakh
Principal repayment Rs 1.5 lakh (included in 80C limit of Rs 1.5 lakh)
Industry wants interest relief limit raised to Rs 5 lakh
5. NORMAL DEDUCTION
Reintroduced in FY19 and integrated transport allowance and medical reimbursement
FY19 Rs 40,000
FY20 (interim) Rs 50,000
A case of increase given the higher cost of transportation and medication, apart from increased expenses due to working from home
OTHER CONSIDERATIONS
Section 80D reimbursement for health insurance. Current limit Rs 25,000. The case for an increase as premiums soared with Covid GST on insurance at 18% is high; a 5% lower tax can reduce costs and increase penetration
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