The Indian National Budget 2023 is around the corner. It is important for citizens to be aware of the potential changes and expectations that could affect their finances.
One of the key expectations from the upcoming budget is an increase in the investment limits under Section 80C.
This section includes investments in life insurance, fixed deposits, bonds, housing, and Public Provident Fund. Currently, the limit is Rs 1.5 lakh. It is expected to be increased to Rs 3 lakh in the Budget 2023.
This increase in limit would encourage more people to invest and secure their financial future.
Higher Standard Deduction:
Another expectation from the Indian National Budget 2023 is an increase in the standard deduction limit under Section 16. Currently, Rs 50k and it is expected to be increased to Rs 100k in the upcoming budget.
This would provide much-needed relief to the taxpayers and make their financial situation more manageable.
Tax Exempt Interest Income:
The Indian National Budget 2023 is also expected to bring in a tax-exempt interest income on the minimum mandatory/voluntary contribution required to be deposited to Provident Fund by employees.
This would provide a significant benefit to the employees and encourage them to contribute towards their retirement savings.
Employment Generation Incentives:
In addition to the above, it is also expected to bring in employment generation incentives like Section 80JJAA of the Income Tax Act, 1961. The government should implement maximum liberalization of these incentives in order to encourage job creation and help boost the economy.
Reduced Tax Rate for New Manufacturing Units:
Another key expectation is a reduction in the tax rate for new manufacturing units of existing companies and software companies.
This reduction should be 15% as it would encourage companies to operate at higher capacities.
In addition to the above, the Indian National Budget 2023 is also expected to bring back weighted deductions at 150% or more under Section 35(2AB) of the Income Tax Act 1961.
This would provide a significant benefit to businesses and help them to grow and expand.
Equal Tax Rate for LLP/Firms:
Another important expectation from the Indian National Budget 2023 is an equal tax rate for LLP / firms. Currently, the income tax rate for LLP/firms is higher than the income tax rate for companies. which does not seem fair at all.
The budget should address this issue and provide an equal tax rate for both.
Taxation of ESOPs:
It should address the taxation of Employee Stock Ownership Plans (ESOPs). These plans should be taxed only at the time of sale, as that is when the actual benefit is realized by the employees.
In conclusion, the Indian National Budget 2023 has the potential to bring in a number of important changes that could significantly improve the financial situation of citizens and businesses. The government should focus on incentivizing investment, promoting job creation, and reducing the overall tax burden on citizens and businesses. If these budget expectations are met, it would certainly be a step in the right direction toward financial success for all.
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