What people and sectors are expecting from Budget 2021?
The coronavirus pandemic has severely impacted lives across the world in many ways. Many people have witnessed financial setbacks in the country during the pandemic. The way people spend or save their money has drastically changed due to economic uncertainties. Work from home has become a 'new trend for salaried employees. Buying an insurance product, especially health insurance has gained much more importance over luxury products.
Finance minister Nirmala Sitharaman is going to present the Union Budget on 1 February, 2021. To boost the economy, the Budget must focus on pushing consumption which means putting more money in the hands of people.
From tax relief to more exemptions, here's what Indian salaried individuals and others expects from Budget 2021
Increase the upper limit of Section 80C
Under Section 80C, an individual is eligible to claim tax deductions of up to ?1.5 lakh on various payments including life insurance premiums, principal payment of home loan, fixed deposits, provident funds etc. Considering the inflation in the recent past, the government may increase this upper limit to up to ?2.5-3 lakh. The rise in the exemption limit will inspire people to spend more on tax-saving instruments backed by the government. The increase in the deduction limit under Section 80C was last increased in 2014.
Hike tax rebate on housing loans
To boost spending and to support the real estate industry, the Union Budget 2021 should introduce more tax exemptions for the homebuyers. Currently, an individual gets ?1.5 lakh exemptions under Section 80C and ?2 lakh under 24B for home loan. The tax rebate on housing loan interest rates under Section 24 should be increased to at least ?5 lakh to generate healthier housing demand.
Increase the upper cap on health insurance premium
The global pandemic has showed us that health insurance is a necessity, not an option anymore. Therefore, the government may increase the upper limit on health insurance premiums under Section 80D.
As per the provisions of section 80D, an individual can claim an exemption of up to ?25,000 (?50,000 or ?75,000 or ?1 lakh if bought for parents) on the premiums paid for the medical insurance of self and family.
Exempt long term capital gain tax:
The government should exempt long-term capital gains on the sale of Indian-listed equity shares. This measure will help the Indian capital markets grow exponentially and also encourage Indian resident investors to invest in the equity market.
Work from home expenses:
Work from home has become a new trend now. It is expected that the government may provide some relief to taxpayers to compensate for the higher cost incurred while working from home; perhaps some deductions for expenses such as electricity etc or some kind of fixed deduction.
Now let’s talk about what industry expects from the budget:
Aviation and Real Estate:
The sector hopes for a reduction in high taxes and levies as airlines as the sector is highly impacted by Covid19.
Several policy steps have been taken to boost real estate in pandemic-hit 2020. The sector is now expecting the government to expand its affordable housing scheme and give more tax benefits to potential homebuyers.
Automobile, Defence and FMCG:
The auto sector has strongly recovered from the economic shock caused on account of Covid19. Automakers now expect more demand-creating measures in the budget for faster sales recovery.
The government is likely to announce higher budget allocation for the defence sector, with focus on indigenous procurement and R&D.
Like automobiles, the FMCG sector also expects more demand-boosting measures to sustain recovery momentum.
Healthcare:
After the pandemic-hit year, India’s healthcare sector is looking for reforms like reduction in taxes on healthcare and treatment besides higher budgetary allocation. Better allocation for pharma research is also on the cards.
Consumer durables/Electronics and Education:
Businesses engaged in selling consumer durables hopes for a reduction in component prices besides a demand push to boost sales.
The government is expected to allocate more funds towards strengthening technological capacities for improving online education in smaller cities, towns and rural areas.
Agriculture and Railways
The government may increase its overall agriculture expenditure to pacify farmers protesting against its farm laws.
Privatisation of trains and infrastructure development remains major priorities for the Indian Railways. Measures may be announced for better public-private partnership (PPP) in passenger train operations.
Finance minister Nirmala Sitharaman is going to present the Union Budget on 1 February, 2021. To boost the economy, the Budget must focus on pushing consumption which means putting more money in the hands of people.
From tax relief to more exemptions, here's what Indian salaried individuals and others expects from Budget 2021
Increase the upper limit of Section 80C
Under Section 80C, an individual is eligible to claim tax deductions of up to ?1.5 lakh on various payments including life insurance premiums, principal payment of home loan, fixed deposits, provident funds etc. Considering the inflation in the recent past, the government may increase this upper limit to up to ?2.5-3 lakh. The rise in the exemption limit will inspire people to spend more on tax-saving instruments backed by the government. The increase in the deduction limit under Section 80C was last increased in 2014.
Hike tax rebate on housing loans
To boost spending and to support the real estate industry, the Union Budget 2021 should introduce more tax exemptions for the homebuyers. Currently, an individual gets ?1.5 lakh exemptions under Section 80C and ?2 lakh under 24B for home loan. The tax rebate on housing loan interest rates under Section 24 should be increased to at least ?5 lakh to generate healthier housing demand.
Increase the upper cap on health insurance premium
The global pandemic has showed us that health insurance is a necessity, not an option anymore. Therefore, the government may increase the upper limit on health insurance premiums under Section 80D.
As per the provisions of section 80D, an individual can claim an exemption of up to ?25,000 (?50,000 or ?75,000 or ?1 lakh if bought for parents) on the premiums paid for the medical insurance of self and family.
Exempt long term capital gain tax:
The government should exempt long-term capital gains on the sale of Indian-listed equity shares. This measure will help the Indian capital markets grow exponentially and also encourage Indian resident investors to invest in the equity market.
Work from home expenses:
Work from home has become a new trend now. It is expected that the government may provide some relief to taxpayers to compensate for the higher cost incurred while working from home; perhaps some deductions for expenses such as electricity etc or some kind of fixed deduction.
Now let’s talk about what industry expects from the budget:
Aviation and Real Estate:
The sector hopes for a reduction in high taxes and levies as airlines as the sector is highly impacted by Covid19.
Several policy steps have been taken to boost real estate in pandemic-hit 2020. The sector is now expecting the government to expand its affordable housing scheme and give more tax benefits to potential homebuyers.
Automobile, Defence and FMCG:
The auto sector has strongly recovered from the economic shock caused on account of Covid19. Automakers now expect more demand-creating measures in the budget for faster sales recovery.
The government is likely to announce higher budget allocation for the defence sector, with focus on indigenous procurement and R&D.
Like automobiles, the FMCG sector also expects more demand-boosting measures to sustain recovery momentum.
Healthcare:
After the pandemic-hit year, India’s healthcare sector is looking for reforms like reduction in taxes on healthcare and treatment besides higher budgetary allocation. Better allocation for pharma research is also on the cards.
Consumer durables/Electronics and Education:
Businesses engaged in selling consumer durables hopes for a reduction in component prices besides a demand push to boost sales.
The government is expected to allocate more funds towards strengthening technological capacities for improving online education in smaller cities, towns and rural areas.
Agriculture and Railways
The government may increase its overall agriculture expenditure to pacify farmers protesting against its farm laws.
Privatisation of trains and infrastructure development remains major priorities for the Indian Railways. Measures may be announced for better public-private partnership (PPP) in passenger train operations.
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