Budget 2021: No relief in income tax, say experts

Union Budget which Finance Minister Nirmala Sitharaman will be presenting on February 1 might create discomfort for the salaried class as the government is likely to leave income tax slabs untouched.

Experts say the middle class may get some relief under Section 80C and 80D.


As reported by ANI, a source from the Income Tax Department said that, stories are being published daily on various news platforms regarding the budget. However, they are far away from the truth.

He further said some people are making their own assumptions and they suggested not to jump to the conclusion. Suggestions are being discussed at top level and no one knows what is being decided.

Tax experts also agreed that there will not be any major Income Tax relief in this budget, as reported by ANI.

DK Mishra, a tax expert said, “Salaried class and middle class have great expectations regarding some tax relaxation. What I saw for the industry sector, the government has already given sufficient stimulus packages from time to time, to give the booster to the industry. The expectation is that the government should increase the 80C limit from 1.5 lakh to somewhere around 2.5 to 3 lakhs.”

He said that there is also a demand to increase the limit of health insurance premium under section 80D, which is currently at 25,000.

“As an expert what I see is, that there is little scope for the government because of the fiscal deficit. The government could not achieve the target of the disinvestment. We should remember that the revenue collections are also not as per the target projection. We are far away from the disinvestment target of 2.1 lakh crore. It seems that the government will not be able to achieve 40% of the disinvestment target in the current year. Looking at all these aspects there may be little relief in the mediclaim insurance or there may be some threshold limit increase or a little relief to the salaried class but I don’t foresee any major tax relief in this budget,” Mishra added.

Neeru Ahuja, Tax Expert and Partner, Deloitte India said slab rates for individuals upto 5 lakh is 5% and then 5-7 lakh is straightaway 20%.

“This is a big gap so there is room for the moderation of the tax slab for individuals. Salaried individuals have incurred extra expenses this year because of work from home, lifestyles changes, so there is an expectation that standard deduction should be increased. The 80C limit, which was laid many years backs also need to be increased,” said Ahuja.

According to Ahuja, the corporate sector has really appreciated government schemes such as production-linked incentives.

“This is an extraordinary year and it calls for an extraordinary situation that needs to be addressed. So I think it would be okay even if the fiscal deficit is breached. The need of the hour is to spur the demand, increase government spending, and look for avenues to increase the revenues as well,” he added.