Union Budget 2022-23: Why salaried class may not get big income tax relief

Taxpayers in the country have a wish list from Finance Minister Nirmala Sitharaman on the individual tax front.

Stagnant income and risk of inflation due to the Covid-19 pandemic severely crippled the salaried class in the country over the past two years. Many people have sought income tax relief from the government in the upcoming Union Budget 2022-23.

Taxpayers in the country have a wish list from Finance Minister Nirmala Sitharaman on the individual tax front.

With the government planning to increase spending on infrastructure in the budget 2022 to set the economy on a firmer footing, it may not have the fiscal space to provide concessions for pandemic-hit households.TAXPAYERS' WISHLISTA survey conducted by world's leading accounting firm KPMG indicated that most respondents expect an enhancement in the basic income tax exemption limit of Rs 2.5 Lakh. Respondents also sought an upward revision to the top income slab of Rs 10 lakh and above.Apart from these, taxpayers feel there should be an increase in the existing section 80C deduction limit of Rs 1.5 lakh.TAX CUTS UNLIKELYFormer RBI Governor D Subbarao said there is little possibility of income tax relief in the budget as the focus will be on the need to raise spending on education, health and infrastructure.“Given the continuing need to raise spending on education, health and infrastructure, I don't believe there is much leeway for tax cuts," he was quoted in a PTI report.FOCUS ON ELECTIONS, RURAL SECTOR The Union budget 2022 will be presented days before the start of elections in five states, including the most populous and politically crucial Uttar Pradesh, a factor that could spur FM Sitharaman to promise higher rural spending and subsidies on food and fertiliser.However, these are likely to be overshadowed by spending to boost transport and healthcare networks, which analysts estimate could rise between 12 per cent and 25 per cent in the next fiscal year, the Reuters report says.FOCUS ON REVIVING GROWTH"We will focus on reviving the economy through higher investments, while individual and corporate taxes will be kept steady," one official, who sought anonymity, told Reuters, adding that reviving growth would be a priority.Two senior government officials said no major budget changes were likely on individual taxes in view of rising government debt and subdued private investment.

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