Table of Content:
- Interest Rebate For Home Loans
- Changes In Income Tax Structure
- Introduction of Mechanisms To Enforce Labour Laws
- Revisions In National Pension System
- Tax Regimes For Firms And LLPs
- Tax Benefit on Promoting Solar Energy
Every Union Budget aims to bring a balanced perspective on the country's economic growth. with the new financial year is approaching, everyone is gazing at their calendar, as Union Budget 2023 is set to be announced on February 1st.
While the expectations around the budget can just be predicted, economic growth and development will remain one of the key focus areas for the Budget of India in 2023. Before we discuss these predictions and expectations around the 2023 Budget, let's first take a look back at what the Union Budget of 2022 focused on:
Growth and all-inclusive welfare
Technology-enabled development promotion
Climate action and energy transition
Infrastructure strengthening
Notably, Union Budget 2023 will also be the last full budget from the current central government ahead of the 2024 Lok Sabha elections.
Also Read: Union Budget 2022: What Were The Most Important Announcements
Union Budget 2023: What Are Homebuyers Expecting?
Interest Rebate For Home Loans
With mortgage rates rising, the real estate industry is expecting the government to increase the interest rebate on home loans from Rs 1.5 lakh. A 2 percent increase in home loan interest rates over the past seven months has been putting increased pressure on households' budgets.
In addition, the rebate hasn't been revised in many years, despite the fact that average house prices have increased significantly.
Also Read: What Does The Union Budget 2022 Meant For Real Estate In India?
Union Budget 2023: What Are the Expectations of Salaried Indian Employees?
Changes In Income Tax Structure
The Budget 2023 is expected to focus on changing the income tax structure and offering some tax relief.
There is an air around that this year’s budget is expected to focus on the rationalisation of the holding period of the capital gains tax regime as well as change tax rates.
Moreover, tax consultancy Deloitte India has suggested lowering the 30 percent highest tax slab to 25 percent, as well as raising the threshold limit for the highest tax slab to Rs 20 lakh.
Covid-19 has impacted the middle and lower middle classes for two years now. So, if the budget looks into increasing the tax limit under section 80C, it will come as a great relief to people from all the salaried Indians for the middle class and lower middle class.
The current limit under Section 80C is ₹1.5 lakh/year. If this limit increases to ₹2 lakh/year or ₹2.5 lakh/year, it can eventually make India an investment-oriented economy.
Also, it is being suggested that with the increased rate of medical insurance and treatments, the existing limit under Section 80D needs revision. It needs to be at par with inflationary growth.
Under Section 80D of the Income Tax Act, a rebate of Rs 25,000 is being given to taxpayers for purchasing health insurance currently.
Introduction of Mechanisms To Enforce Labour Laws
There are 29 existing labor laws. The government proposed to replace those labor laws with four codes, Industrial Relations Code, the Code on Wages, Social Security Code, and the Occupational Safety and Health and Working Conditions Code. As 90% of India's labor is unorganized, these codes will ensure the workers make the most out of the benefits of labor laws.
But, even after Parliament approved the codes in 2002, State Governments are yet to adopt them. The mechanism to push the adoption of these labor laws is expected to be simpler in the Union Budget 2023.
Union Budget 2023: What Are the Expectations of Pensioners?
Revisions In National Pension System (NPS)
The National Pension System is a voluntary retirement scheme for those making a defined contribution and planning a secure future in the form of a pension. The main motive behind this scheme is to provide retirement income to every citizen of India. Section 36 (1) (iva) in this scheme allows tax deduction if the employers contribute towards NPS. The only catch here is that it cannot exceed 10% of the employee's salary.
On the other hand, the Central Government has increased its percentage of contribution towards NPS from 10% to 14%. The same changes are expected in Section 36 (1) (iva) to bring uniformity between them in Union Budget 2023.
Union Budget 2023: What Are the Expectations of Partnership Firms?
Tax Regimes For Firms And LLPs
The Government has provided a concessional tax system for:
Individuals
Hindu Undivided Families (HUF)
Domestic companies
Cooperative societies
But, there is no concessional tax system for Limited Liability Partnerships (LLPs) and Partnership firms. They are taxable at a rate of 30%. The upcoming Union Budget 2023 is expected to introduce some concessional tax regimes for firms and LLPs.
Union Budget 2023: What Are the Expectations of the Sustainable Sector?
Tax Benefit on Promoting Solar Energy
Did you know that India is the world's third-largest renewable energy producer? Nineteen thousand five hundred crores were allocated for the Production Linked Incentive (PLI) to manufacture high-efficiency solar modules. Despite this, solar energy has not yet gained the desired momentum.
The Government is expected to introduce tax benefits and subsidies for companies and taxpayers who install solar panel plants in Union Budget 2023.
This is it for now. Ensure you keep checking our page to learn more about the union budget 2023 in the coming days. Stay tuned!