Budget 2023 expectations?

 

On February 1, Finance Minister Nirmala Sitharaman will present the 2023-2024 budget. There is a lot of expectation that Sitharaman will provide relief to Indian taxpayers in the form of tax slab revisions, the decision on LTCG, equity investment, and steps to boost demand for the housing sector.

 

Will the finance minister revise income tax slabs? 

 

With no tax on income up to 2.5 lakh, 5% for Rs 2, 50,000-5, 00,000;

20% for 5, 00,000-10, 00,000, 30% for income above 10 lakh. Experts are suggesting that Sitharaman may increase the starting limit for the 30% tax bracket from 10 lakh-20 lakh. It’s also speculated that changes might occur in the slab rates under the Concessional Regime that was introduced in the Budget in 2020, and income tax on Rs up to 5 lakh might be exempted and the lowest tax of the 5% rate can be fixed at 7.5%.

 

Will there be any change in LTCG? 

 

LTCG is a long-term capital gain which means an investment that provides a return in a long-term period. The LTCG was discontinued in the year 2005 but was again reinstated by the bjp government in the year 2018. experts and analysts are in view that the finance minister will rationalize the LTCG tax structure and even revise the base year for computing inflation-adjusted capital gains. 

The government may also revise the holding period for calculating LTCG in the forthcoming budget. 

 

Direct tax growth momentum may be tough to sustain 

 

The government may find it tough to maintain the growth momentum in direct taxes. Direct tax collection has been growing at a rate of 19.5%.

Lowered GDP could impact income tax collections, which include individual and corporate taxes the government official said. This change can put pressure on the government. 

 

The real estate sector seeks to tax and policy relief 

 

The real estate sector has demanded tax and policy-related relaxation in the budget 2023-2024. Realtors are hopeful that the government will roll out incentives for housing demands which were severely hit during covid.

 

Insurers hope for tax concessions 

 

Indian insurers are hoping for tax concessions on their policyholders. Slash is of GSTs insurance premiums, making the pension proceed tax-free, and creating a separate category for a tax deduction for premium are on the wishlist of insurance company decision-makers – IANS reported.

 

Incentives such as a GST exemption or a lower GST slab can help meet consumers’ needs even more. Pension/annuity proceeds should be tax-free in the hands of policyholders, or a deduction for the principal component should be permitted,” said Satishwar B, Managing Director, and CEO of Aegon Life Insurance.