As 2023 approaches, all eyes will be on the impending Budget 2023, which will be announced on February 1 by Union Finance Minister Nirmala Sitharaman. Professionals and salaried taxpayers alike anticipate a number of tax relief measures from the budget. However, a lot of experts think that the Budget may not contain any significant announcements.
The government would consider the budget for 2023 to be crucial. The government will present this final full budget before the 2024 elections. As a result, we typically cannot anticipate any significant help from the government in such circumstances, according to CA ALOK KUMAR, Partner, S.K.Mehta & Co, Chartered Accountants. “The emphasis would be on expenditure in this budget,” he adds.
Working professionals still have certain expectations from the Budget, though. Here is a list of some of these demands:
Presumptive Taxation
The government instituted presumptive taxation in Budget 2016 under which only half of a professional’s receipts were taxed as his income. Only professionals with annual incomes up to Rs 50 lakhs were allowed to sign up for this programme. The government may raise this ceiling from Rs. 50 lakh to Rs. 75 lakh or Rs. 1 crore, according to CA Alok Kumar.
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Change in TDS Rate
Professionals from all walks of life, would anticipate clarity regarding the application of Section 194-R’s requirements in light of the Supreme Court’s ruling in Mahindra & Mahindra Ltd.
“The government must make it abundantly apparent that debt write-offs are not benefits or perks acquired through the practise of a profession, and are therefore exempt from TDS under Section 194-R. Naturally, a lead time of up to a few months must be allowed, and the provision’s effective date must be delayed in line with the practical problems.
change in tax slab
Additionally, the tax slabs have not undergone a significant change since 2014. The highest tax rate still applies to income beyond Rs. 10 lakhs, despite the basic exemption threshold having been raised to Rs. 5 lakhs.
“We expect the government will be able to raise the slab rate from the current Rs 10 lakhs to Rs 20 lakhs. According to the new regime, a similar adjustment could be made to the slabs, raising the highest slab from the present Rs. 15 lakhs to Rs. 30 lakhs.
“Now would be a wonderful moment to deliver these advantages to the Indian people so that there is more money in their hands and would lead to higher domestic spending,” he continues. “With the country out of the agony of COVID, and the future for the economy looking solid.
Extension of the Basic Exemption Limit
The main demand that would affect not only professionals but everyone in general is an increase in the basic exemption level from the existing Rs 2.5 lakh. Given that Section 87A provides a rebate for those with incomes up to Rs 5 lakh, increasing the exemption level to at least Rs 5 lakhs makes sense and will simplify the first step in calculating income tax.