With the arrival of the Union Budget 2022, many people including the salaried and middle class were hoping to be the recipients of good news. This is owing to the elevated inflation levels and the impact of the ongoing global pandemic. During COVID-19, many people have suffered from the string of layoffs that went on with several companies, leaving scores of people suddenly unemployed.
It’s no surprise that many were anticipating relief in income tax slabs or the reduction of inflated market rates. At present, the basic exemption limit on taxes is Rs. 2.5 lakhs per annum, with incomes between Rs. 2.5 to Rs. 5 lakhs being taxed at 5%. People who are in the income bracket of Rs. 5 to Rs. 10 lakhs are taxed at the rate of 20%. And, those who earn above Rs. 10 lakhs are taxed at 30%.
Unfortunately, the announcements by Finance Minister Nirmala Sitharaman didn’t contain the ease of lowered taxes and prices. However, as part of the many changes and implementations, a concessional rate of 15% has been extended by an additional year for newly incorporated manufacturing units.
While this may have dashed the hopes of countless salaried individuals, there are still several aspects to Sitharaman’s speech that may still impact them. Whether the impact will be positive differs from person to person. But, you may wonder, which part of this could be considered a positive? It’s the lack of change, or rather, the stability the lack of change provides, during these uncertain times.
Any changes in the tax regimes, had they been negative, could have adversely affected the financial stability of lakhs of people in the country. Though, not all of us have made it out of the Union Budget speech unscathed. With the recent trends of people investing in digital assets, it became imperative for the government to levy certain charges upon such transactions.
Those who own such digital assets or cryptocurrency will be faced with a heavy tax deduction of 30% on all profits made, while losses cannot be set off. Also, all the profits made will come under taxable income, and will not be viewed as capital gains.
However, before the Union Budget 2022 became public, there were many speculations and predictions made prior to its release. With groups like the salaried and middle class expecting new provisions for tax-related benefits.
Let’s take a look at a few changes salaried individuals had been counting on.
Deduction of COVID-Related Expenses
During the COVID-19 outbreak, many households incurred sudden expenses related to hospitalization and treatment of family members. With the fear of pandemic caused hospitalization, people were expecting some relief on the expenses borne.
Special Allowances for WFH Individuals
While many employees and individuals are currently working from home, the need for setting up personal offices is at an all-time high. And so is the need for tax-free work to be introduced from home allowances.
Rising Maintenance Charges
Another area with significant rising charges is the monthly or annual maintenance charges paid by homeowners. This called for compensation for salaried taxpayers, who own only one property, with the compensation aiding in the charges paid to the society and property taxes paid to local authorities.
Extension of Leave Travel Concession
Salaried individuals also expected cash voucher schemes with an extended leave travel concession under Section 10 (5).
Whether you have been directly or indirectly affected by the new Union Budget, keep yourself updated on all the latest changes and implementations.