NAGPUR: Tax professionals are expecting Covid relief for the salaried class in the Union Budget. Tax practitioners hope that the government takes 2020 as an exceptional year and comes up with special measures, mainly for the salaried class.
They suggest that the job losses and pay cuts can be compensated through some relaxation from the taxation side.
Chartered accountant (CA) Julfesh Shah sought reduction in tax rates. “The peak rate should be reduced to 25% as against 30% now,” he said.
Shah further said the limit of exemptions through investments under the section 80c of Income Tax Act should be increased to Rs2.5 lakh and standard deduction doubled to Rs1 lakh.
CA Kailash Jogani too called for reducing tax rates. He stressed simplification of the taxation regime, especially by doing away with the concept of taxing notional income. “Tax should always be on the income at the hands of an assessee but on many counts it is also levied on the grounds that it may have led to any income. For example, capital gains tax is calculated only on the basis of ready reckoner valuation even if the actual deal takes place at a lower rate,” he said.
“The government should also not make frequent changes after the budget. Simpler systems can bring more persons under the tax net,” said Jogani.
The Confederation of Real Estate Developers’ Association of India (Credai) has submitted a memorandum seeking substantial increase in the exemption under repayment of interest and principal of home loans. “The present limit of Rs1.5 is too less,” said Gaurav Agarwala, president of the association’s Nagpur unit.
Agarwala said the association has also demanded that subsidy under Pradhan Mantri Awas Yojana must be extended for another year apart from continuing of income tax sops for builders taking up affordable housing projects.
Pritam Mahure, a CA from Pune, said salaries have been cut but liabilities in the form of EMIs are same. “There can be some measures on easing tax burden to offset the loss due to pay cuts,” he said.
Financial adviser Ranjit Dani said the budget should not be inflationary as it may reduce the real interest on savings. The government is charging both securities transaction tax and long-term capital gains on equity. “One of the two should be removed. There is scope to reduce taxes on dividend distribution. The company already pays taxes on its profits,” he said.
TAXATION
WISH LIST
- Reduce peak tax rate to 25% from 30% now
- Increase section 80c limit to Rs2.5 lakh and standard deduction to Rs1L
- Do away with taxing notional income
- Increase exemption under repayment of interest and principal of home loans
- Extend PM housing scheme subsidy for another year
- Continue tax sops for builders taking up affordable housing projects