Hit hard by the pandemic, job loss and declining income, the common man looks to FM with great hope.
It’s budget time again and the countdown to the 2022 Union budget has begun. If the pandemic does not play a role, Finance Minister Nirmala Sitharaman will most likely present her fourth budget on February 1 of this year.
Last year, the government announced several stimulus packages to rejuvenate the economy affected by the COVID pandemic. It had followed countercyclical fiscal policy to stabilize the business cycle. This policy requires the government to cut spending / raise taxes in good times and increase spending / reduce taxes in bad times.
“To a large extent, these policies have helped the Indian economy recover from the recession. Typical economic recoveries occur in V, W, Z, U, and L forms. However, economists are starting to think that the recovery after COVID-19 could be K-shaped, as technology and large capital firms collide. recover faster than small businesses and industries directly affected by COVID-19, such as the hospitality industry, ”said Naveen Wadhwa, GM, Taxmann.
While these stimulus packages have given momentum to the recovery, they have also caused the inflation rate to rise. Thus, the minutes of the US Federal Reserve meeting signaled that the central bank may raise interest rates sooner than expected. This is a signal that the Indian government may also be thinking about decreasing market liquidity.
Either way, hit hard by the pandemic, job loss and declining income, the common man looks to the Minister of Finance with great hope.
Here we take a look at how the 2022-2023 Union budget could provide tax relief for Covid patients and their families:
It can be noted that looking at the devastating impact of the COVID-19 pandemic, central government, state governments, employers, friends and philanthropists are providing financial assistance to infected people and their families. Yet many people in the country receive no financial support and are struggling on their own.
Tax experts believe these people should receive a tax deduction for the amount they incur for Covid treatment. The government should consider providing tax breaks for such financial assistance and providing deductions for medical treatment expenses.
“The government had issued a press release, dated 25-06-2021, providing that taxpayers receiving financial assistance from their employers and supporters to cover expenses incurred for the treatment of Covid-19 would benefit from an exemption income tax. Thus, any sum received from the employer or any other person for the treatment of Covid-19 would be tax exempt, ”specifies Wadhwa.
In addition, if a taxpayer dies due to COVID, any financial assistance received by a family member is exempt without limit when the financial assistance is received from the employer of the deceased. However, when financial aid is received from any other person, the exemption amount will be limited to Rs 10 lakh in total.
It was mentioned in the press release that the necessary legislative changes will be made in this regard in due course. However, no amendment has yet been made. Thus, the government could make the necessary changes in the next budget.
“Currently, Section 80D of the Income Tax Act allows up to Rs 50,000 to be deducted from total gross income for any expense incurred for the medical treatment of an elderly person (60 years or older) to provided that it is not covered by health insurance. . Thus, the deduction for medical expenses is deductible when two conditions are met. First, the person for whom the expenses are incurred must be an elderly person, and second, no medical insurance policy has been taken out for that person, ”Wadhwa informs.
“It is recommended that the scope of Article 80D be extended to any person (regardless of age) to allow a deduction for expenses incurred for the medical treatment of Covid-19 for themselves or a member of his family, ”he adds.
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