For Salaried Class, a standard ‘work from home’ deduction besides reasonable hike in the standard deduction, for home expenses during work from home phase is expected.
Deductions for investments in PPF, LIC, etc. are capped together at Rs.1.5 lakh per annum in total. The increase since around six years for cap on the deduction is not commensurate with the average annual cost of inflation. It needs to be increased to at least 2 Lacs.
Travel and tourism and construction took the worst hit during the pandemic. Incentives in the form of provisions to tax the Indian economy had taken a hit but is now on the road to recovery.
For MSMEs, stringent RBI Norms need to be reviewed. Reducing the compliance burden and easing foreign exchange flows would give a real boost to the MSME sector. Giving a boost to MSMEs would serve the purpose of creating new employment opportunities, which is real need of hour.
As regards GST, various compliances in the GST filing mechanism are turning out to be an inconvenience for honest taxpayers and a disruption to the ease of doing business. The stringent laws with regard to claiming input tax credit, making monthly payments, etc. need to be simplified with immediate effect.
It is expected that the main theme of Budget 2021, would be focus on manufacturing sector, making India self-reliant, digitization through Digital India, healthcare, agriculture and MSME.