What Can We Expect From the Upcoming Budget 2022 In Terms of Taxes?

The Union Budget 2022 is round the corner, and the expectations and reports from various sources are going round the table. It is believed that the Budget will be growth-oriented and focus on the improving current scenario of the economy and lives of common people. However, the budget is made for all, but, the tax is one of the most anticipated topics among the taxpayers as well as the non-payers as it is directly linked with our daily spending and income. Budget 2022 is also expected some tax benefits. These benefits are expected to benefit the common people's income.

Increase Standard Deduction

The country's salaried class is staring at the budget in anticipation of a slew of changes that would touch their daily life. According to reports, the government is considering increasing the standard deduction limit for salaried employees and retirees during the 2022 budget session. Further, the standard deduction should be doubled from Rs 50,000 to Rs 1,00,000 per year to keep up with escalating medical and gasoline costs. If enacted, the measure will be in response to appeals from industry groups such as FICCI, Assocham, and CII.

Cryptocurrencies' Taxability

The Reserve Bank of India (RBI) tried to give guidelines through a circular, but the Supreme Court overturned it. It is important for a cryptocurrency to be recognized by the government in order to be considered a currency. To yet, the government has refused to recognize cryptocurrencies as legal tender. The present regulations under Indian tax laws do not mention bitcoin transactions as a source of revenue. During the Parliament's Winter Session, a measure to regulate Cryptocurrencies was scheduled to be introduced. It was not, however, introduced, and it is now expected that the Budget Session will determine whether it is taxable.

COVID-19 Treatment: Separate Deduction

The Covid-19 epidemic has been wreaking havoc throughout the world, including India, for the past two years or more, but the government has yet to establish a particular deduction under the Income Tax Act of 1961 to pay the treatment costs for COVID-19 patients who are not covered by any health insurance. As there is no explicit provision that addresses COVID-19 treatment, a separate deduction capped at Rs 1,00,000 or actual treatment costs paid by the taxpayer for self or family, whichever is smaller, may be considered.

Provision of TDS/TCS on Cryptocurrencies

According to several sources and tax experts, both the sale and purchase of cryptocurrencies over the threshold limit should be included under the scope of the next Union Budget 2022's tax deducted at source (TDS)/tax collected at source (TCS) provision. This will assist the government in determining the size of the investment base. According to reports, such transactions should be classified as specified transactions for income tax reporting. Experts also believe that the proceeds from the selling of bitcoin may be subject to a higher tax rate. Point to note, everything around the crypto is speculations and not can be determined.

Enhance Deduction On Home Loan Interest

If the government raises the house loan interest deduction ceiling to Rs 2 lakh under section 24 (b) in the 2022 budget, it will bring much-needed assistance to homeowners who have been battling to keep up with the rising costs of vital goods. It is projected that the interested maximum would be increased to a large amount in order to alleviate the financial burden of taxes, allowing more home buyers to realize their goal of buying a property. To promote demand for affordable homes, it is anticipated to hike the present maximum of Rs 2 lakhs per annum on interest on house loans to Rs 5 lakhs per annum.