Salaried class and middle class have many expectations from the Finance Minister regarding the Budget 2021. The common man wants the FM to make a big announcement regarding income tax relief. The basic exemption of Rs 2.5 lakh in income tax should be increased to Rs 3 lakh. However, experts believe that this time, the income tax slab is not expected to change much in this budget. According to experts, salaried class and middle class should not expect relief in the income tax slab but can expect relief under section 80C and section 80D in the budget.
On the other hand, some tax experts feel that there is still scope for change in the tax slab. According to the current income tax slab, no tax is levied up to Rs 2.5 lakh, 5 percent tax is levied from Rs 2.5 lakh to Rs 5 lakh, there is 20 percent tax from Rs 5 lakh to 10 lakh. That is, tax goest to 20 percent directly from 5 percent, which is a big difference. Therefore, there might be an option to change the tax slab of the government.
Demand to increase rebate section under 80D
There is also a demand to increase the limit of rebate on health insurance premium under section 80D in Budget 2021. At present, this rebate is Rs 25,000 for people below 60 years. Common people are demanding that it should be increased to Rs 50,000. Rising medical expenses have been cited as the reason behind this. During the coronavirus epidemic, awareness among people about medical insurance has also increased. If the government increases the limit under 80D, then the scope of medical coverage will also increase.
Demand for standard deduction 1 lakh
Tax experts believe that work from home has burdened additional expenses above the salaried class, so the government can provide relief by increasing the standard deduction in the budget. Currently, the salaried class gets a standard deduction of Rs 50,000. There is a demand to increase it to Rs 1 lakh.
Tax exemption on investment in NPS may increase
It is expected that the government can increase the tax exemption limit under 80CCD (1B) on investment in National Pension Scheme from Rs 50,000 to Rs 1 lakh. Currently, there is a tax rebate of up to Rs 50,000 on investments in NPS. This tax exemption is on top of Rs 1.5 lakh exemption available under 80C. That means the total exemption is Rs 2 lakh.
There are reports that the government can provide relief to those who have to spend on the treatment of COVID-19. The government can include the amount spent in the treatment of coronavirus in the tax deduction. If this happens, then all those people who got corona infected and spent a huge amount of money in treatment will get relief. It is being claimed in reports that this can be announced in the budget.
Due to the coronavirus pandemic, the health sector is expected to get more attention in this budget. With the COVID-19 vaccination in full swing and the government setting aside a substantial amount to finance this, experts believe that the government would enhance the budgetary allocation for the healthcare sector, and the vaccination campaign would have a bigger share in it.
"It is widely accepted that digital health or health-tech companies would play catalysing role in the healthcare sector, hence we expect that Union Budget would provide not only adequate incentives but also provide rational policies for robust standards and designs of the systems and processes. We are expecting adequate budgetary support and policy push which would ensure that all solutions are tethered to patient benefit, while also lowering overall health system costs," says Prem Sharma, CEO and founder of DayToDay Health India.
"Overall, in the current situation, the healthcare sector would be expecting a paradigm shift in terms of budgetary provisions," he adds.
Reports say that more money will come out of the government's pocket for the health sector. At present, 1.4% of GDP is being spent on the health sector, but it is expected that the government can increase it to double as it aims to spend 4% of GDP on the health sector by 2024.
This budget is going to be quite different from the budget presented so far because it is being presented amidst many challenges. The biggest challenge is the coronavirus pandemic, from which the country has gradually recovered and has now moved towards vaccination. Notably, there will be no paper printing of the budget this time and the documents will be provided in a digital way. The government has also developed a new mobile app for the budget.