Hope For Relief Ahead Of Budget Session

  • 29-Jan-2021
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With an aim to incentivise the new optional income tax regime introduced in the last Budget, the government proposes to tweak the list of eligible rebates and exemptions to allow some more categories of financial savings instruments for taxpayers.

The emerging view in the discussions in the run-up to the Union Budget is in favour of reducing the tax burden to push more demand by ensuring more disposable income. This is aimed to be done through tax proposals to incentivise the new tax regime rather than any major overhaul in the income tax slabs in the earlier regime, two officials involved in the exercise said.

In several of the representations made before the Budget, demands have been placed to extend the leave travel concession cash voucher scheme, extension of tax benefits for medical expenditure to all taxpayers, a hike in interest rate limits for home loans, and tax concessions for first-time homebuyers in the old tax regime.

 

However, the government is inclined to offer more benefits under the new regime, sources said. The long-term focus is on eventually moving towards a no-exemption regime – so, the new tax system will get priority and incentives compared to the older regime, an official said.

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