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Higher standard deduction for salaried taxpayers likely
Higher standard deduction for salaried taxpayers likely
The Union Budget 2022 may include a higher standard deduction for salaried taxpayers and tax incentives related to affordable housing this time.
New Delhi: The Union Budget 2022 may include a higher standard deduction for salaried taxpayers and tax incentives related to affordable housing this time. The government has received many proposals to this effect, appealing to the Union Finance Minister to increase the existing standard deduction limit for income tax.
In fact, the salaried taxpayers are anxiously waiting for the budget announcements, especially the ones related to income tax. The Union Budget will be announced by Union Finance Minister Nirmala Sitharaman on February 1.
Expectations among the country's taxpayers remain high as no major benefits related to income tax were announced by the government in the last budget.
As taxpayers remain hopeful about some announcements in the upcoming budget, it has come to light that the government is holding discussions to increase the limit of standard deduction from the existing Rs 50,000.
The standard deduction limit available to salaried taxpayers and pensioners may be increased by 30-35 per cent in the upcoming budget, according to a senior official in the ministry. However, the income tax slabs are likely to remain unchanged.
The official said the government has received many suggestions related to personal taxation. Out of all the suggestions, the most common one was to increase the limit of standard deduction, given the rising cost of medical expenses due to the Covid-19 pandemic.
He added that the proposal is to increase the standard deduction limit by 30-35 per cent. It may be noted, however, that the proposal has not secured approval yet. The current tax collection situation is likely to play a big role in deciding the fate of the proposal.
However, the standard deduction limit will only be applicable to eligible taxpayers who opt for the old income tax structure. The limit is not applicable in the case of the new tax regime.
It is worth mentioning that a standard deduction of Rs 40,000 was introduced in 2018 and it was later enhanced to Rs 50,000 in the interim budget for 2019. The only major income tax-related decision since then has been the introduction of the new tax filing regime.
