Budget 2023 expectations highlights: Change in tax slabs, interest sops for home buyers

Budget 2023 Expectations Highlights: Given that it’s her last big spending opportunity before next year’s general elections, it won’t be unreasonable to expect Finance Minister Nirmala Sitharaman to sprinkle the February 1 Union Budget with a dose of populism. 

India’s salaried expect the finance minister to provide healthcare, savings and housing sops in a post-pandemic, high inflation era while focusing on jobs and expanding the tax base to increase cash in hand.

Here’s what they want on February 1 The present tax slab with basic exemption limit of ₹2.5 lakh income to be hiked to ₹5 lakh under old and new tax regimes, necessary with inflation in context. This limit has been unchanged since 2014-15. Both regimes may also be unified for a more simplified system.Man

Homebuyers now claim a yearly deduction of up to ₹2 lakh on interest paid on housing loan EMI and up to ₹1.5 lakh under Section 80C for principal amount paid on the same. They expect a hike in this limit to ₹5 lakh and Section 80C limit to ₹3 lakh.

Many also expect incentives for personal loan borrowers since at present there is an exemption limit on interest only on education loans under Section 80E of the Income Tax Act.

The biggest demand is a uniform tax structure for capital gains.

Educationists are expecting tax incentives and enhanced subsidies to private and public educational enterprises to enhance their contribution to knowledge and research.

Deductions such as 80C, 80D and education loans are utilised extensively by the middle-aged taxpayers who have the dual responsibility of looking after the health of aged parents and paying for their children’s higher education. The health situation, post-Covid, has become precarious with medicines, immunity boosters and healthcare costs on the rise. They are expecting a hike limits for deduction under section 80D and also the kind of expenses that could be permitted as a deduction.

Sops for future workplaces

Krishna Kumar, Founder and CEO of edtech company Learnbay expects “Work from Home allowance” in Union Budget 2023. As businesses have been divided over the concept of moonlighting, Centre can also issue notification outlining the tax consequences of this aspect.

Recently tech firms have been news for voluntary separation policies and not paying due severance amidst layoffs. As per Vikash Chandra, COO of tech career platform, Cutshort announcements surrounding notice period, severance, job retaining and support and regulation of layoffs should be made in the Union Budget 2023. Further guidelines surrounding work from home and hybrid workplaces can be expected.

Gig economy

Shantanu Rooj, founder and CEO at TeamLease EdTech mentioned that with the budget announcements the government should take measures to simplify taxation processes for the gig workers.

The gig economy, which is expected to employ 23.5 million people by 2029–30 and account for almost 4 percent of all income in the nation, there are currently 7.7 million employees employed, according to a research recently released by NITI Aayog in June 2022.

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