1- Tax exemption can be limited to Rs 3 lakh
The biggest expectation from Budget 2021-22 is that this time the government may increase the tax exemption limit. The current tax exemption limit is Rs 2.5 lakh, which can be increased to Rs 3 lakh. This expectation also appears to be because, in the last almost 7 years, this limit has not changed. In the July 2014 budget, the then Finance Minister Arun Jaitley increased the limit from Rs 2 lakh to Rs 2.5 lakh.
2. Investments under 80C may increase the limit
Currently, under Section 80C of the Income Tax Act, income tax exemption of up to Rs 1.5 lakh is available. This time it is likely to be increased to Rs 2 lakh. The government has also received suggestions that it should be doubled to Rs 3 lakh. This too has not changed in the last 7 years. In July 2014, the then Finance Minister Arun Jaitley increased it from Rs 1 lakh to Rs 1.5 lakh.
3. Relief may increase under 80D in the corona period
The entire year of 2020-21 has been in the throes of Corona. In the meantime, many people have fallen prey to corona and have to spend a lot on drugs. Many also increased their medical insurance coverage in anticipation of future risks. Considering Corona’s tenure, it is also hoped that the government may increase the deduction of Rs 25,000 under 80D to Rs 50,000 this time, taking into account medical insurance. This limit for senior citizens is likely to be increased to Rs 75,000.
4. Exemption under 80CCD (1B) may increase in NPS
In this budget, it is expected that the tax exemption limit payable under NCC i.e. National Pension Scheme under 80CCD (1b) will be increased from Rs 50,000 to Rs 1 lakh. If you invest up to Rs 2 lakh in NPS in the current scenario, you can get tax exemption of up to Rs 2 lakh by adding Rs 50,000 for 80CCD (1B) and Rs 1.5 lakh for 80CCD (1). However, in this case you cannot get tax exemption on any investment (PPF, Tax Saver FD, ELSS) under 80CCD (1).
5. Deduction from work to home
There has been a significant change in the way Coro worked during the period. Many people are working from home. In Budget 2021 the common man hopes that the government can also give some tax exemption for working from home, as the employee has to set up internet, chair-table and sometimes a small office to work from home. It is expected that the government should announce a standard reduction for it.
Important steps to promote term insurance
It is also hoped that the Modi government can take a big step in this term to promote term insurance. In fact during the Corona period, many people understood the importance of term insurance, but still many people hesitate to spend money on it. Term insurance is essential for the care of one’s family after the death of any person.
This time the budget may take a covid cess
The cost of vaccinating 130 crore people to prevent corona infection could range from Rs 50,000 to Rs 60,000 crore. The finance minister will have to take steps to raise this amount through additional resources. The country’s fiscal deficit is projected to be more than 7 per cent of GDP during this financial year. It was projected at 3.5 percent in last year’s budget. It is therefore possible that these costs in the form of cess could be levied only on the shoulders of tax payers.