Taxes are required payments to the government that must be made. Almost all citizens who get income of any kind are subject to taxation. The government uses the money it collects for a variety of development projects, including building roads, public hospitals, schools, and other facilities. Direct tax and indirect tax are two different types of tax.
People have historically viewed taxes as an expense that requires them to give more than they receive. The government receives a sizable portion of the income in the form of taxes, leaving behind a very less portion of income for the person. So, in the view of people, the tax liability must be reduced so that they can resort more to saving and investing the residual part of their income.
So here is the Union Budget 2023 around the corner, and our Respected Union Finance Minister Nirmala Sitharaman has decided to give some relaxation this time. So following are the tax benefits that could be expected in the Union Budget 2023.
Standard Deduction Hike
As said by Amit Gupta, MD, SAG Infotech “A deduction limit that has stayed steady in recent years should be increased to account for growing living costs”.
Standard deduction is a deduction allowed from the gross salary income of individuals and pensioners receiving income. This income helps to reduce the tax burden of a person by lowering their taxable salary income. This concept was introduced in the year 2018 and provided a standard deduction of Rs. 50000. Salaried-class taxpayers expect a rise up to Rs. 1,00,000/- in the standard deduction.
Increase Section 80C Exemption
Section 80C exemptions can be used by salaried persons to reduce their taxable income. Any person eligible under this section can get a reduction in their taxable income by 1.5 lakhs in a fiscal year.
It is proposed that this limit may be increased from 1.5 lakhs to at least 2.5 lakhs.
Enhancement in the home loan deduction limit
This is the maximum amount of deduction that can be provided on home loan. Currently, this limit is up to Rs. 2 lakhs. But as the inflation rate is rising over the years, enhancement in the home loan deduction limit is a much-required amendment. It is proposed that the limit may be increased from Rs. 2 lakhs to Rs. 3 lakhs.
Enhancing the deduction limit under Section 8TTA
This Section is applicable to savings bank accounts. This section gives a deduction of RS. 10000 per annum on the interest of such accounts. This limit is the same since its introduction and thus it should be increased, also a large number of people prefer to keep their money in the savings account. It is proposed that such limit may be increased to Rs. 20000 per annum.