What should you expect from Budget 2022?

What should you expect from Budget 2022?

Whenever the budget is about to be announced, each sector has its own expectations especially in the eye of comman man it means a lot.

My views on some points that need to be addressed in this budget 2022 as going to be presented on 1st Feb 2022:

1. Tax rate for Firms and LLPs should reduced:

We all know that tax rate for company has been reduced to 15% but in case of firms and LLP tax rate is still 30%.

Definition of startup also cover Firms and LLP along with company but tax rate is very big barrier while forming firm/LLP. Hence tax rate for firm LLP should reduced.

2. Work from home allowance for salaried employee:

Salaried employees are expecting the Government to provide a Work From Home Allowance in the upcoming Budget 2022 to provide tax relief on expenses incurred for carrying out office works from home during the pandemic.

3. Increased in Standard Deduction limit:

Government should increase the Standard Deduction limit under Section 16 of the Income Tax Act from Rs 50,000 to Rs 1 lakh as cost of living has gone up.

4. Limit for interest on housing loan should be increased:

At present limit for interest on housing loan is Rs. 2,00,000 but to cater the current expectations itvshout be increased to 3,00,000 to 5,00,000.

5. Deduction of Chapter VI A:

Since so many years deduction under section 80C ( pertaining to Life Insurance Premium, Contribution to Provident Fund, Public Provident Fund, contribution to Unit linked Insurance plan, LIC mutual Fund, tuition fee of children etc.) is restricted to Rs. 1,50,000. By keeping in view of current scenario this amount is too small.

This amount of deduction is to be increase at least double, i.e. Rs.3,00,000

6. GST liability on receipt basis:

Government should follow the concept of Service Tax regime to give relief to small service providers.

So by following this small assessee should discharge their GST liability on receipt basis upto Rs. 60 lakhs.

7. GST rate for service sector should reduced to 15%:

Service sector playing a significant role on employment generations and considering the various aspect GST rate would be reduced to 15% for this sector.

8. Section 80D limit should be increase by atleast Rs.15,000:

By considering the current situation it is need of hour that medical insurance limit should be increased by at least Rs. 15,000.

Govt should also increased the limit for medical insurance for senior citizen as well.

9. Msme expectations:

It is very essential to promote MSME sector. In this aspect one window solution should be given to them. By using this one stop solution they can have all answers related to tax, subsidy, amount recovery etc.

One more sector that require special attention that is regulation for crypto currency with respect to Direct Tax, Indirect Tax as well as regulatory aspect. Even as per prevalent law I have tried to cover income tax aspect for Crypto currency that can be reached by following link:

Let's see how Government cater the requirement of all sector. Stay tuned till then.

Author of this article can be reached on mail abhishek.jaipuriya@gmail.com or through social platform like youtube channel/ Facebook page by following CA Abhishek Jain.