Budget 2023 Expectations: Salaried Employees’ And Senior Citizens’ Wishlist From The Budget
While we await the Union Budget 2023, check this list of Budget 2023 expectations of salaried employees and senior citizens.
Finance Minister Nirmala Sitharaman is set to present her 5th Union Budget on February 1, 2023. Given the current recessionary environment across the globe, Sitharaman needs to find a way to balance between maintaining a fiscal deficit and pursuing public expectations.
In the Union Budget 2023-24, Nirmala Sitharaman is expected to focus on job creation, and improve the funding for manufacturing, agriculture, infrastructure, and other important sectors. With this being the last full Budget of the Narendra Modi-led government before Lok Sabha Elections 2025, the Finance Minister is also expected to announce some tax relief measures for salaried employees and senior citizens.
While we will know the finer details of the Union Budget 2023 only on February 1, let us take a look at some of the Budget 2023 expectations of salaried employees and senior citizens.
What Are The Salaried Employees’ Expectations From Budget 2023?
Revision Of Income Tax Slabs: As inflation and the cost of living continue to rise, the taxpayers’ hard-earned money continues to lose value every year. Currently, 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. With Budget 2023, salaried employees, who are the largest group of taxpayers in the country, are expecting that the government will raise the basic tax exemption from ₹2.5 Lakh to at least ₹5 Lakh.
Revision Of HRA Rules: Salaried employees expect a revision in the definition of ‘metro cities’ in the calculation of the House Rent Allowance (HRA). Currently, only 4 cities- Mumbai, Delhi, Kolkata, and Chennai fall under the category of ‘metro cities’ and only the employees in these cities can claim income tax benefits through HRA deduction. However, the cost of living in other Indian metro cities like Bangalore has also increased. Hence, salaried employees anticipate a revision in the HRA rules.
Increase In Standard Deduction Limit: The Union Budget 2018 introduced the standard deduction policy in the income tax rules. This allowed salaried employees to get a standard tax deduction of up to ₹40,000. The government then increased this limit to ₹50,000 during the 2019 interim budget. With the upcoming Budget 2023, taxpayers and financial experts believe that the standard deduction limit should be increased from ₹50,000 to reflect the increasing cost of living.
What Are The Senior Citizens’ Expectations From Budget 2023?
Revision Of Income Tax Basic Exception For Senior Citizens: One of the main senior citizen expectations from the Union Budget 2023 is that the threshold of the basic income tax exemption for senior citizens (individuals above the age of 60 years) should be increased from the current limit of ₹3 Lakh to ₹5 Lakh, at par with that of very senior citizens (individuals above the age of 80 years).
Revision In The 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 Senior Citizen Savings Scheme, Public Provident Fund (PPF), 5-year term deposit, National Savings Certificate, etc. However, this limit has not been revised in the last 8 years. Senior citizens are now expecting an additional relief under Section 80C in addition to the current limit of ₹1.5 Lakh.
Revision of The Medical Treatment Limit For Senior Residents: Under Section 80DDB of the Income Tax Act, resident individuals are allowed a deduction for the amount spent on the medical treatment of specified diseases. Senior citizens are allowed a deduction of ₹1 Lakh under this section. However, given the ever-increasing cost of medical treatments, senior citizens are expecting this limit to be increased in the Union Budget 2023.