Standard deduction hike

For paid individuals and pensioners, the standard deduction is a deduction allowed from gross salary income. This deduction lowers the individual's taxable salary income, lowering his or her tax burden as well. Under the former tax structure, which is still utilised by the bulk of filers, all salaried employees are entitled to a ₹50,000 deduction. 

“A deduction limit that has stayed steady in recent years should be increased to account for growing living costs," said Amit Gupta, MD, SAG Infotech.

 

Increase 80C exemption

Salaried persons can use Section 80C exemptions to reduce their taxable income by ₹1.5 lakh in a fiscal year. 

Archit Gupta, Founder and CEO of, Clear said the limit for 80C has been set to ₹1,50,000 for a long time. It is expected that the limit for 80C is to be increased to meet the requirement of today to at least ₹2,00,000. 

“The exemption ceiling should be increased to ₹2.5 lakh in Budget 2023," said Amit Gupta

Archit Gupta said that the 80D limit for medical insurance premiums should be increased for senior citizens from ₹50,000 to ₹75,000 to ₹1,00,000.

Rejigging tax slab rates

Finance Minister Nirmala Sitharaman announced a new, optional tax regime while presenting the budget 2020. However, the new tax regime has found few takers to date.

“The smallest individual income tax bracket is 5%, while the highest is 42.74 percent, including surcharges and cess. A raise in the basic exemption level between ₹2.5 lakh to ₹5 lakh, as well as a cut in income-tax rates in Budget 2023, is required to reduce the maximum slab rate to 25%," said Amit Gupta.

Siddharth Maurya, Resource Specialist, Expertise in Real-Estate and Fund Management said personal tax relief should be provided in the Union Budget 2023, either through lower rates of taxation or by reorienting tax slabs. Technical changes to various taxes are required to make them more progressive and effective. Such measures could be included in the Union Budget 2023.

Work From Home Allowance

Some relief should be allowed to individual taxpayers who are setting up a home office for work from home, said Archit Gupta.

The list of expectations from Sitharaman's Budget is long. We will have to wait till 1 February 2023 to see how many of these were fulfilled.