As Finance Minister Nirmala Sitharaman started working on the Union Budget 2022-23 with her team, some great news emerged about the economic growth of India. After a huge dip in multi-year finance, the GDP growth rate has again made it through. The Indian economy grew by 8.4 percent showcasing an upward trend unlike the contraction last year. The economy of India is expected to grow at 9.4 percent this year.
Some common taxpayers and investors reached out to financial companies for some suggestions on the coming Budget 2022-23. The Budget wishlist of investors, taxpayers and the financial assistance industries hasn’t changed much in the past few years.
The taxpayers expect lower taxes, the industry expects more tax deductions for the facilities they provide while the investors expect more reforms. Thus, meeting these demands might be tough for the government as the latter is already grappling with the ill effects of the pandemic to bring the Indian economy back on track.
Therefore, government finances have declined and tax cuts will only worsen things. Last year’s budget withdrew the tax exception to interest gained by the contributions above INR 2.5 lakh a year to the PF (Provident Fund.) It also brought ULIPs with a contribution of above Rs 2.5 lakh a year in the tax net. Taxpayers must be prepared for more such measures instead of expecting tax breaks.
In this crucial time, some relief actions are sorely required. For example, the pandemic made everybody comprehend the benefit of health insurance. Hence, the high GST rate on medical insurance pushes up the insurance premium. “The GST rate must be reduced from 18 percent to 5 percent,” says Tapan Singhel, the CEO and MD of Bajaj Allianz General Insurance. This will pressurise the government finances.
Some other concepts could bring relief without even affecting the tax collections. The falling interest rates have disturbed the fixed income investors but besides this, the retirees and the senior citizens faced the worst hit.
While the Union Budget 2022-23 promises streamlining taxation procedures, investments and incentives to startups, easing up the compliance procedures, adapting technological processes will aid the implementation of these goals.
The investment limit of all the Senior Citizens’ saving plans have been limited at INR 15 lakh. At the common interest rate, this would mean that a retiree could receive a maximum pension of around INR 27,750 per quarter.
Prableen Bajpai, the founder of Finfix Research and Analytics, stated that the new investors raised their expectations to increase the investment limit for SCSS and PMVVY by Rs 25 lakh per person in order to make the pension reasonable. We hope that the above-declared statements and some other suggestions will raise a flag in the Finance Bill 2022-23.
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