Budget 2021: Need for tax exemption to increase demand

1. Need for tax exemption to increase demand, know on which front it will benefit “Finance Minister Nirmala Sitharaman has described the budget for the upcoming fiscal as a budget that has never been presented in such an environment before. This Union Budget can focus on increasing government spending to improve the country's economy.” After the decline in the growth rate of the economy in 2020, some important steps are expected to be taken by the government to give a new momentum to the economy. The present economic situation must also be considered before anticipating tax relief. There is a lot of pressure on the financial resources of the government. It is expected to shrink to 8-10% of GDP. The fiscal deficit is at record highs. Also, large-scale spending on the Corona Vaccination Program is planned. The need to increase government expenditure, especially capital expenditure, is increasing. Therefore, it is useless to expect large scale rationalization in income tax slab or rate. Personal Finance Approach Many economic experts have sent their recommendations to the Finance Ministry to give relief to taxpayers. According to sources, in the current adverse situation, the government may announce several relief measures or concessions in the Union Budget 2021 under the self-sufficient India package. This will help people to combat the effects of the corona virus epidemic.At present, there is a lot of pressure on the financial resources of the government. The finance minister may announce the issuance of some savings schemes or tax-free bonds, which will provide the government with financial resources for spending. Investment-based relief and flexibility can be found in this budget to make up for the economic loss. Investment and bond issuance of retail investors will also be encouraged in these schemes. Capital gains in relation to investment and STT in relation to investment will also boost the economy. VINOD K AGRAWAL & ASSOCIATES, CA FOR MORE DETAILS: https://cavkagrawal.business.site/ Page 1

2. Expectation from budget The time of the government budget for the New Year i.e. FY 2021-22 is approaching. The general public, which has been troubled all year by Covid-19, needs great relief. Let us know what his expectations can be from the government in the budget. 1. Increased deductions for medical costs: The awareness of health has increased among the people due to Covid-19. In such a situation, it will be right to increase the deduction of Rs 5000 now available at the health checkup. Expectation of deduction for medical tests and treatment by the general public will be justified. 2. Relaxation is essential in residential status: It would also be reasonable to expect a concession in the Norms to assess taxable income according to residential status as many people are stuck in India due to restrictions on international air travel. 3. Remove Five-year condition on PF withdrawal: Withdrawal of money from PF is taxed if not in job for five years. A five-year bet can be expected to be lifted given the job losses during the Covid-19. 4. Standard deduction for WFH infrastructure met: Work from home has become new normal due to Covid-19. Professionals have to pay additional expenses for communication and infrastructure. Giving benefit of standard deduction for these expenses would be a welcome step. 5. Increased standard deduction of housing property expenditure: Due to the epidemic, demand for housing property has come down and rental income has come down. Despite the property being vacant, the house owners have to pay the maintenance cost of their income. It would be appropriate to increase the rate of standard deduction by 30% for at least two years. VINOD K AGRAWAL & ASSOCIATES, CA FOR MORE DETAILS: https://cavkagrawal.business.site/ Page 2