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Budget 2023: Top income tax expectations of individual taxpayers explained

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Budget 2023 income tax: Finance Minister Nirmala Sitharaman should put more disposable income in the hands of people by way of income tax slab and exemption changes, says Parizad Sirwalla. In an interview with TOI, the Partner and Head, Global Mobility Services – Tax, KPMG in India lists out the top Budget 2023 expectations of individual taxpayers.
“The income tax rates and slabs have been largely static over a period of time, though of course a new tax regime came about in 2020,” she notes. “The most common Budget expectation from a taxpayer’s perspective is that the basic tax exemption limit should be hiked. It is currently at Rs 2.5 lakh, it should go up to Rs 5 lakh,” she tells TOI.
Parizad Sirwalla also recommends simplification of the capital gains tax regime from an investment income perspective. “These days most individuals invest in the capital markets. Currently, the capital gains tax regime is a complicated maze,” she says.
Also Read | Union Budget 2023: New Income Tax regime needs these slab & exemption changes
Parizad goes on to explain, “There are different periods of holding for different kinds of assets. A debt instrument may be classified as a long term if you hold it for 36 months. A property may be classified as long term as an example if you hold it for 24 months, but a listed equity share is classified as a long term asset if you hold it for 12 months.” “There’s a fair amount of complexity from a common man’s perspective in knowing this entire capital gains tax regime and navigating it. To top it up, even the tax rates of capital gains could be different. So for certain things it’s 10% long term capital gains, for certain assets it could be 20%, so on and so forth,” she adds.
Also Read | Union Budget 2023 income tax: Why FM Sitharaman should hike standard deduction – tax saving explained
From a long-term spending perspective, she talks about housing loan benefits. “Everyone dreams of buying a home. These are long term commitments, mostly it’s on mortgage. So the deduction for interest on housing loan is around Rs 2 lakh. With the rise in interest rates, the limit is not sufficient for people to claim the entire interest as tax deductible,” she tells TOI.

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