A majority of respondents (64 per cent) feel that the Union Budget 2022-23, to be unveiled on February 1, will increase the basic income tax exemption limit from the current Rs 2.5 lakh, according to a pre-budget survey by KPMG in India.
As many as 36 per cent of the survey respondents felt that the 80-C deduction limit of Rs 1.5 lakh will be increased, while 19 per cent felt that the standard deduction could be increased for salaried class from the current Rs 50,000.
Sixteen per cent of the respondents felt the Budget could provide for tax-free allowances/ perquisites for salaried individuals keeping in mind the work from the home arrangement — provision of internet connection, furniture and earphones.
KPMG in India’s pre-budget survey was conducted in January 2022.
About 200 finance professionals participated in the survey.
As many as 64 per cent of the respondents said they expect the basic I-T exemption limit to be raised from Rs 2.5 lakh a year.
With the government reducing the headline corporate tax rate for domestic companies from 30 per cent to 22 per cent starting from the financial year 2019-20, the gap between the rates applicable to foreign companies and domestic companies has widened, the survey said.
Currently, Indian branches of foreign companies are subject to corporate tax at 40 per cent.
“A majority of respondents believe there is a need to reduce the rate applicable to Indian branches in line with the 2019 rate cuts, in order for India to remain a globally competitive investment jurisdiction,” the survey added.