With just a few days left for the Union Budget 2023, tax relief expectations of salaried individuals in the Rs 10 lakh+ income group are growing. Several industry and tax experts are hoping that the upcoming Budget will help the middle class and salaried individuals with revisions in the existing Income tax slabs and rates.
Most salaried employees and industry experts are expecting a revised tax slab, especially for those in the higher tax bracket, from Budget 2023.
“A revision in tax slabs is expected, especially for the Rs. 10 lakh+ income group. The tax rate may reduce from 30% to 25%. Lastly, investors also await an extension in the limit to claim tax deductions and exemptions for tax-saving tools including NPS, PPF, and ELSS from this Union Budget,” says Bharat Phatak, Director of Scripbox.
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It is also expected that the upcoming Budget will rationalise the taxation of capital gains across asset classes.
“With a few days left for the Union Budget, taxation is likely to be a major consideration this year with expectations for the rationalisation of capital gains tax and revision in the tax slab for salaried individuals. Capital gains tax ranges from 10% to 20% depending on the asset class and whether or not it’s publicly listed. Budget 2024 may ease investors’ dilemma by simplifying taxes on different asset classes over short and long-term gains, says Phatak.
Meanwhile, insurance industry experts have suggested that Budget 2023 should provide a separate tax exemption facility for insurance-related expenses.
“Recognizing insurance as a critical protection need and a long-term investment; the government can consider providing a separate tax exemption slab for insurance as opposed to it being currently clubbed in 80C along with other investments. This would motivate more individuals to opt for protection,” says Casparus J H Kromhout, MD & CEO of Shriram Life Insurance.
Satishwar B, MD & CEO, Aegon Life Insurance says that pension/annuity proceeds should be made tax-free in the hands of policyholders, or a deduction for the principal component should be allowed. “Further, an aggregate deduction of up to Rs 1.75 lakh, for the premiums paid for life and health can be introduced to nurture the eco-system of insurers, insurtechs and consumers,” he adds.
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“Increasing the limit to claim tax deductions under Section 80C and 80D would further increase the adoption of life and health insurance products, says Mukul Kanchan, VP and Head of Finance at Plum.