Budget 2023 Expectations: What can you expect from Budget 2023, changes from income tax slab to HRA rules? – mssewb.org

Budget 2023: Salaried employees are the largest group of taxpayers in the country. On the one hand, salaried employees are the largest contributors to the overall economy. As per Income Tax Returns 2022 data, 50 percent of tax returns are filed through ITR 1 by salaried individuals. Ahead of the announcement of the Union Budget 2023 by the Finance Minister on February 1, salaried employees are expecting some big announcements on tax cuts and slab rate hikes.

The primary reason why salaried workers are expecting big tax relief is that despite higher cost of living and investment or insurance premiums, tax savings have remained the same since 2014. So they are looking forward to the government to introduce some long pending amendments in the Income Tax rules to facilitate the living conditions of the salaried employees.

Some key expectations of salaried employees from Union Budget 2023 are:

● Amendment of Tax Slab: Currently, taxpayers can choose between two tax regimes while filing tax, whereby their income is exempt from tax up to Rs 2.5 lakh and no tax is applicable for income up to Rs 5 lakh. Salaried employees, who are the main tax payers, are expecting the government to increase the tax exemption from Rs 2.5 lakh to at least Rs 5 lakh in this year’s Union Budget.

● Amendments to HRA Rules: Salaried employees expect that there needs to be an amendment in metro city definition for House Rent Allowance (HRA). At present only four cities Delhi, Kolkata, Chennai and Mumbai fall under the metro city category and employees of these cities benefit from HRA. In the last few years, the cost of living in other important cities of India, including Bangalore, has gone up a lot.

● Tax Exemption for Home Buyers:
To boost affordable housing, salaried homebuyers are expecting the government to provide them with additional steep concessions from the Union Budget 2023.

● Discount on Personal Loan: Although education loans and personal loans comprise 35 per cent of the country’s credit market, Section 80E of the Income Tax Act only provides a deduction limit on education loan interest and no exemption is given to personal loan borrowers. Salaried employees will also expect some relaxation in personal loans this year.

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