Union Budget 2023 : In the Union Budget 2023, taxpayers especially the middle class people are expected to get great relief. Recently, Finance Minister Nirmala Sitharaman had said that she is aware of the challenges faced by the middle class people .
This has raised the expectations of taxpayers. Experts say that this budget will be the last full budget of the Modi government before the Lok Sabha elections next year. That’s why the Finance Minister can take measures to give relief in the matter of tax to the middle class people.
Finance Minister Nirmala Sitharaman will present the Union Budget on 1 February . Currently, if an investor’s profit from shares or equity mutual funds is less than Rs 1 lakh in a financial year, then he does not have to pay any tax. He has to pay 10% tax on profit above Rs 1 lakh. Tax experts say that this limit is too low. Keeping in mind the inflation, increasing income, it needs to be increased to Rs 2.5 lakh. This will also increase the interest of investors in schemes of shares and equity mutual funds.
Basic Exemption and 80C limit should be increased
After the formation of Narendra Modi’s government at the center, the basic exemption limit for a person up to 60 years of age was increased to Rs 2.5 lakh in the budget 2014. After that, the government has not made any changes in it, while due to inflation, the real income of the people has been greatly affected. So the government needs to increase it in the Union Budget 2023.
The limit under Section 80C of the Income Tax Act has also remained at Rs 1.5 lakh since then. Experts say that there is a need to increase this limit to provide relief to the middle class people. Apart from this, the benefit of tax deduction on medical expenses also needs to be given to all types of taxpayers. Again companies are laying off their employees. This is especially seen in the technology sector.
In such a situation, the standard deduction is expected to increase for young taxpayers. Currently, the standard deduction is Rs 50,000 in a financial year. It needs to be increased. Young taxpayers are also expecting a reduction in tax rates from the government.
Relief from capital gains on investment in debt
Investors say that the government should reduce the tax rates on capital gains from investing in debt. Long term capital gains in debt funds are currently taxed at 20 per cent. Short term capital gains are taxed as per the tax slab of the investor. Finance MinisterUnion Budget 2023 may announce a reduction in capital gains tax rates for debt investments.
Pension income should be tax-free
There has been a demand for making pension income tax-free for a long time. Life insurance companies and PFRDA also believe that a large number of people will be benefited by keeping pension income out of the purview of income tax. At present, pension income and annuity of retired people are taxed. Annuity purchased through the pension policy of the National Pension Scheme and life insurance comes under the ambit of income tax.
