Union finance minister Nirmala Sitharaman will present the Union Budget 2023-24 in Parliament at 11am on Wednesday – the last full Budget of the Narendra Modi government before the next year’s Lok Sabha election. As always, the middle class will have the highest expectations from the Union Budget 2023–24 since, according to the income tax department, salaried professionals submitted around 50 per cent of their income tax returns (ITR) in 2022.
What are tax slab, PPF expectations from Budget 2023?
Income tax slabs: At present, taxpayers have the option to choose between two income tax regimes while filing taxes. Through these regimes, their income is exempt from tax up to ₹2.5 lakh and no tax is applicable for up to the income of ₹5 lakh. Salaried employees are expecting that the Modi government will increase the basic tax exemption from ₹2.5 lakh to at least ₹5 Lakh.
Section 80C limit: Under Section 80C of the Income Tax Act, taxpayers are allowed a tax deduction of up to ₹1.5 lakh for investments in various instruments. These include the senior Citizen Savings Scheme, Public Provident Fund (PPF), 5-year term deposit, National Savings Certificate, etc. Interestingly, this limit has not been revised in the last eight years. Now, the middle class is expecting an additional relief under Section 80C in addition to the current limit of ₹1.5 lakh.
Public Provident Fund (PPF): The Institute of Chartered Accountants of India (ICAI) recently demanded in the pre-budget memorandum 2023 that the PPF investment limit should be increased to ₹3 lakh per year from the current limit of ₹1.5 lakh. PPF attracts investors because of the triple tax benefits offered by the scheme. The ICAI said increasing the ceiling of PPF contribution can boost domestic savings and also benefit account holders,
Bottom line:
The salaried class is expecting exemptions in tax slabs and increasing their take-home income by:
1) Increasing the minimum tax slab from ₹2.5 lakh to 5 lakh
2) Increasing school fee slab for exemption
3) Increasing limits for 80C
4) Healthcare incentives for lower-salaried people
5) Monetary policy measures to boost savings