Budget 2021-21: Centre may give tax benefits to aam admi after all

 The Finance Ministry is reportedly mulling changes to direct tax administration to ease the compliance burden and put more money into the hands of the taxpayer to boost pandemic-curtailed discretionary spending.

Other than changes in tax slabs, the North Block is mulling the extension of leave travel concession scheme, increased tax relief for health insurance and home loan repayments, as per reports. Several experts had demanded the above measures to give a flip to consumer confidence which has been severely hit in the wake of Covid-19 pandemic.

The Direct Tax Task Force had proposed some measures which are currently being looked at by the Finance Ministry, according to a report in Economic Times.

Tax disputes are frequent now owing to the different interpretation of tax laws by different tax officers which also leads to revenue loss for the exchequer. This has led to calls for a more transparent and easier compliance regimen.

A final decision on the matter will be taken after an assessment of the revenue loss to the exchequer if these sops are given to the aam aadmi (common man). The Budget 2021 will be presented in the Parliament by FM Nirmama Sitharman on February 1.

On the direct tax front, the Direct Tax Task Force had recommended the expansion of the tax slabs in August 2019 to the government.

It suggested a tax rate of 10% on those with the annual income of Rs 10 lakh, 20% for those with income in the range of Rs 10-20 lakh and 30% on incomes between Rs 30 lakh – Rs 2 crore and 35% for those earning above Rs 2 crore. Presently, the highest tax slab is 30% and it is applicable to everyone earring above Rs 10 lakh per annum.