Budget 2021 Expectations: Will Budget 2021 bring more tax relief for people, firms amid pandemic?
Union Budget 2021 Expectations for Tax Relief: Prime Minister Narendra Modi-led government has recently undertaken various measures to go away more income with people and corporations , to spur demand within the economy. whilst the govt has already brought down the company tax and brought changes within the income tax slabs, there are expectations of further relief in tax liabilities within the upcoming budget. “Increase within the maximum exemption limit under section 80C is long overdue and will be increased from Rs 1.5 lakh to Rs 2.5 lakh. this may mobilise household savings and encourage investment,” Gouri Puri, Partner, Shardul Amarchand Mangaldas & Co, told Financial Express Online.
Currently, as long as a private earns but Rs 5 lakh, is his income exempt by way of a tax rebate. This rebate mechanism might be wont to subside to an increased basic exemption limit of Rs 5 lakh, such no individual offers tax on their first Rs 5 lakh of income, Gouri Puri added. The budget 2021 poses unprecedented challenges for the govt as never before within the history of the country has India faced such a situation. From being the fastest-growing economy within the world, India’s economy is now contracting. the govt has already been quite responsive by issuing various compliance relaxations, financial incentives and other initiatives to assist businesses.
“During these times, reducing the tax burden on individuals to enable further spending, thus increasing demand within the economy is required ,” Neeru Ahuja, Partner, Deloitte India, told Financial Express Online. Finally, reassurance is required on certainty and surety on regulations for a minimum of medium to future , rather than too many and frequent short-term changes, Neeru Ahuja added. a strong research and innovation policy is additionally the necessity of the hour, Ahuja further said.
Meanwhile, the company tax rates were cut before the pandemic to 22 per cent from 30 per cent for companies that don’t seek exemptions, and to fifteen per cent from 25 per cent for brand spanking new manufacturing firms. Also, within the income tax, the rebate under Section 87A has been hiked to Rs 12,500. this is able to effectively make liabilities zero for taxpayers having net taxable income not exceeding Rs 5 lakh.