Union Budget 2022: Almost a week before the Union Budget 2022-23, expectations are high. Experts say it is especially because there have not been too many reliefs for the common tax-payer in the last 2 years.
Sanjib Jha, CEO and ED, Coverfox.com, says, “This year, the 80C limit is expected to rise to a minimum of Rs 2 lakh after a stagnancy of 7 years at Rs 1.5 lakh.” He further adds, “Even the 80D limit for health insurance premiums is due to rise this Financial Year after a 5-year stagnation at Rs 25000 in FY2015-16. Since then, there has been no change except the senior citizen’s limit to Rs 50,000.”
In FY 2020, the industry had witnessed a significant rise in premium and inflation along with demand. Thus, experts say, the tax exemption limits also need an enhancement. Given the high medical costs, a higher tax rebate will ensure more disposable income with the growing middle class, thereby encouraging people to buy the much-needed health policy.
Experts say people are now expecting that the Union Budget could bring about some confidence and stability in current volatile markets. With state elections lined up in over five states in 2022, a focus on job creation and investment-driven growth would be paramount. To boost consumption, experts say an increase in the limit of the standard deduction and home loan tax deductions will also be welcomed.
Additionally, industry experts say complete tax exemption on annuity plans is something that the common man has been looking forward to a long time. Jha explains, “The long-standing expectation of a complete tax exemption on annuity along with additional Rs 50,000 deduction U/S 80CCD(1b) to make it at par with NPS, would surely make annuity attractive.”
Unlike other countries, experts point out India has not provided any specific tax relief due to the pandemic. Thus, “the insurance industry expects a relief in terms of lowering GST on insurance from 18 per cent to 5 per cent,” adds Jha.