Your Money: Pandemic-hit taxpayers look for tax sops in Budget

Now that it is a long-term epidemic, taxpayers are anticipating a reduction in their taxes, in order to make more money lost.

By Shailesh Kumar

The new year not only brings new hope and excitement but also raises hopes among taxpayers on the unveiling of the Union Budget for the coming financial year. Any reduction in income tax results in a direct increase in the amount of money spent in the hands of taxpayers. Now that it is a long-term epidemic, taxpayers are anticipating a reduction in their taxes, in order to make more money lost. Some of the tax incentives that taxpayers expect from the 2022 Budget are outlined here.

Although the government initiated and expanded tax deductions, there have been differences between the expectations of taxpayers and the reduction of taxes in which the ministry is promoted. The 2020 budget was the last resort, when tax breaks were introduced to introduce a new tax system whereby all taxpayers could get lower prices but at a lower cost of non-tax deductions and non-exemptions.

In the 2022 Budget, taxpayers expect the government to reimburse taxpayers, in order to provide relief to taxpayers. It will be more profitable for taxpayers if all tax rates are set at Rs 5 lakh, while up to Rs 10 lakh is taxed at a nominal tax of 5%. Taxes for taxes in excess of Rs 10 lakh can be adjusted accordingly.

Increased forgiveness
The vast majority of taxpayers are in the payroll. The amnesty granted under the Income-Tax Act, 1961 has not been reviewed by the government for a long time. Considering the current rise in inflation, the amount of cash flows should also be adjusted from Rs50,000 to Rs 1 lakh.
Covid’s recent days have seen an increase in the amount of money that taxpayers pay for medical and life insurance. People who did not have medical insurance or life insurance are now doing the same because of uncertainty about medical bills and life-threatening risks. As a result of the increasing number of medical complaints, insurance companies have increased their fees which has resulted in an increase in taxpayers. We expect the government to review the existing procedures for removal that are permitted under Section 80C and Section 80D respectively, and increase the same by 50%, in line with the increase in the cost of living and medical insurance.

Forgiveness for Covid patients, families
The government has authorized financial assistance from employers or relatives to cover the costs of Covid-19 and the death of a Covid-19 patient. The state media has said that the necessary changes will be made, but no changes have been announced so far. Considering that the time is near to set the Budget now, the government may come up with some necessary legislative changes in this regard.

The epidemic has affected every aspect of people’s lives and today it is very unlikely that the government will make a decision without reviewing it. We hope that the government will make an effort and make this Budget more complex and compassionate in order to address the unexpected losses and difficulties that taxpayers face.

The author and colleague, Nangia & Co LLP

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