Budget 2023-24: 'Salaried class seeks simplified personal tax regime, increase in income tax slabs'

By Anita Basrur
People are eagerly waiting for the Union Budget 2023-24 announcements. This is one annual activity that the citizens look forward to. The expectations from various sectors are high keeping in mind the general elections that are to be held next year.
People are looking at solace to their financial concerns keeping in mind the impact of Covid and other health care needs. Also, Covid has had an impact on employment which they would like the government to address.
Salaried people would be expecting an increase in tax slabs and higher tax reliefs from the government.
Further, there is a huge demand for simplification of the personal tax regime with an intent to provide more liquidity in the hands of the taxpayers to boost the demand side for the economy. Relief to small taxpayers by increasing limits for deductions under Chapter VI-A.
Industry would expect certain tax cuts for start ups and technology. Similar to new manufacturing companies, lower tax rates for start ups and technology would be a good boost.
Currently set off of losses under M&A is allowed only to a handful of specified business activities. To boost the economy and the service sector, provisions to be expanded for allowing set-off of business losses and depreciation even on service sector M&As.
There is a need for rationalizing of capital gains tax regime because of different rates for different assets, different status of assessee and depending upon different holding period.
Education is the back-bone of every economy and at the same time is also very costly. One of the main demands of the middle class is to move tuition fees of children to a different provision from the 80C of the Act. The existing provision, already saturated with a lot of things including investments/expenses and has an upper ceiling limit of Rs 1.5 lakh is too low considering the growing prices and inflation.
Withholding tax keeps the government machinery running. However, there is a lot of overlap and confusion in the various provisions.
In order to help better compliances, it would be good for the government to give more clarity and make the provisions more simple. Clarification on obtaining Form 10F in case of non-resident entities not having PAN in India from April 1, 2023.
There is a need to re-look at exemption and deductions provided to salaried class as the limits defined have not been changed for many decades.
(The author is partner, direct tax at Sudit K Parekh & Co.LLP)