New Delhi: Budget 2022-23 hasn’t brought much cheer for the middle class as Finance Minister Nirmala Sitharaman shied away from announcing any changes in the income tax slabs or deductions.
FM Sitharaman presented her fourth Union Budget Tuesday, with her speech spanning just over 90 minutes.
It was widely expected that the FM would announce higher deductions under Section 80C of the Income Tax Act, that is for investments made in provident funds, LIC premiums, equity-linked savings scheme, principal amount payment towards home loan, among others.
Section 80C allows a maximum deduction of Rs 1.5 lakh every year from the total income of taxpayers.
The income tax limit has not been increased in the last couple of years as the government has announced a new optional tax rate regime starting 1 April 2020, which offers a lower tax rate for those who give up on the benefit of tax deductions for select savings and expenses.
1 minor relief
The only relief FM Sitharaman offered Tuesday was to provide taxpayers an opportunity to correct errors in income tax returns — they can now file an updated return within two years from the relevant assessment year.
“The Income Tax Department has established a robust framework of reporting of taxpayers’ transactions. In this context, some taxpayers may realise that they have committed omissions or mistakes in correctly estimating their income for tax payment,” the FM said in her speech.
“To provide an opportunity to correct such errors, I am proposing a new provision permitting taxpayers to file an updated return on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year,” she added.
The government would also provide equal treatment to state government employees now as compared to central government employees. The government increased the tax deduction limit from 10 per cent to 14 per cent on the employer’s contribution to the National Pension Scheme account of the state government employees as well.
“This will enhance their social security benefits,” Sitharaman said in her speech.
(Edited by Amit Upadhyaya)