[saisree]

Our Countries Financial Budget is coming on Feb 1 2022. There seems to be more focus on this budget (not that the earlier ones did not have focus) since, its coming when we the country is crawling back to pre COVID era.

There are various articles, suggestion to the Finance Ministry on
1. Decrease Direct taxation rates
2. Increase the taxation slab ranges
3. Increase in 80C deduction from 1.5LPA to 2.5 LPA
4. Increase the zero tax base from 2.5 LPA - 5 LPA
etc.,

And there is a new proposal on bringing back the Expenditure tax which was last annulled in the mid 1980's by abolishing Income tax.

My expectation are the following.
1. Given that, only 1.6% of the whole population is paying direct taxes, I'm of the opinion that, GoI do away with Income tax and depend on the GST/ indirect taxes. This will improve the savings and also drives consumption generating indirect taxes.
2. Increase subsidies for EV's and Solar Electricity.
3. Bring Petroleum products under GST. (I know many State Govts are against this)
4. Move more items under lower GST brackets.
5. Soaps for Service industries to bounce back.

So, what is your expectation on the budget.

[ValarMorghulis]

Originally Posted by saisree

My expectation are the following.
1. Given that, only 1.6% of the whole population is paying direct taxes, I'm of the opinion that, GoI do away with Income tax and depend on the GST/ indirect taxes. This will improve the savings and also drives consumption generating indirect taxes.
2. Increase subsidies for EV's and Solar Electricity.
3. Bring Petroleum products under GST. (I know many State Govts are against this)
4. Move more items under lower GST brackets.
5. Soaps for Service industries to bounce back.

So, what is your expectation on the budget.

Point 1 is never going to happen. Income tax accounts for 20% of the government's revenue receipts and no government is going to let that go especially when it means levying more tax on others. Link
The only way income tax paying citizen is going to affect any policy change is when they unite and vote en-masse, which , IMHO, is never going to happen.

Point 2 has merit.
Point 3 State governments are never going to let that happen and if we go by precedence, Union government simply lacks the political will for a fight
Point 4 See point 3 above
Point 5 Unless some body (trade body, hotel association, etc.) asks (by ask I mean threaten to vote together) for this, seems difficult.

This being an election year in major states, expect it to be a populist budget.

[sen2693]

Originally Posted by saisree

Our Countries Financial Budget is coming on Feb 1 2022. There seems to be more focus on this budget (not that the earlier ones did not have focus) since, its coming when we the country is crawling back to pre COVID era.

There are various articles, suggestion to the Finance Ministry on
1. Decrease Direct taxation rates
2. Increase the taxation slab ranges
3. Increase in 80C deduction from 1.5LPA to 2.5 LPA
4. Increase the zero tax base from 2.5 LPA - 5 LPA
etc.,

I am keeping my hopes low on this so am pleasantly surprised if it all it happens. Even if this is a budget before election, I think this is a big move that will hit IT revenue for govt. quite a bit. Hence, I doubt if all of the listed suggestions will be made.

Taking away LTCG would be good. Paying tax for long term investments is just a bit depressing. All working folks need to save for a better future and post-retirement. Equity is one of the best returning instruments over long term and taxing profit from that is just not okay. Plus dont think government would lose much by making this go away as against reducing direct tax.

[saket77]

Good thread and we can continue the discussion here even after the budget is out.

A lot of relevance of budget has been taken away by the fact that since last 2 years, a lot of fiscal policy changes have been made mid-way during the year, esp in wake of COVID. However, budget is always important as it lays the basic road map of where the Govt wants to take the country to.

Originally Posted by saisree

3. Bring Petroleum products under GST. (I know many State Govts are against this)

Even if petroleum products are brought under the GST, I am sure a new/ special slab will be carved out for fuel which would allow 100% taxation on the base price. The regular 12%/18%/28% slabs just won't do for petroleum.

Moreover, since the year 2024 will be Central Govt election year, I will expect a populist budget only next year in Jan'23.

But for this year, I DO NOT expect a populist budget.

[DaptChatterjee]

My expectations with the current Finance Minister is abysmally low. I am just praying that she does not do away with old tax regime completely or reduce exemptions. At the best case scenario, she'll let the income tax slabs and exemptions untouched.

[msdivy]

Might consider voluntary donation from UHNWI. Ref: https://www.oxfam.org/en/research/inequality-kills and this.

• 4% tax on the wealth on India's 98 billionaires can take care of the Mid-Day-Meal scheme for 17 years or the Samagra Sikshya Abhiyan for 6 years.
• 1% wealth tax on the 98 billionaires would finance Ayushman Bharat for more than seven years.
• 1% of tax on wealth of the 98 billionaires can take care of the total expenditure for school education and literacy.
• 4% tax on wealth on the 98 billionaires would be enough to fund Mission POSHAN 2.0 (includes Anganwadi Services, POSHAN Abhiyan, Scheme for Adolescent Girls, and National Creche Scheme) for 10 years.
• A 2% tax on individuals with an income of over Rs 10 crores (Rs 100 billion) could increase the ministry's budget by an astounding 121%.
• If the wealth of the first hundred billionaires are accumulated, they could fund the National Rural Livelihood Mission scheme, responsible for creating Self Help Groups for women, for the next 365 years.

[AirbusCapt]

My post is not a reflection of my political leaning. It is merely a comment on the current governments economic performance.
Given that the last two years we have been battling an unforseen pandemic, the government has very little room to maneuver. Ideally the government wants to raise its revenue, since expenses have risen drastically due the covid programs and free rations to the teeming poor. However politically it is in no position to either increase income tax (thereby making the salaried class upset), or by tinkering with additional taxes/cess on fuel and goods (thereby reducing consumption and business activity) or by doing away with the old tax regime (thereby drastically reducing housing loan consumption, housing rent market, tax saving funds market, vehicle lease market) among the others.
The present finance ministry is amongst the least imaginative ministry in the government. They don't have the brains or the gumption to make drastic and radical changes even during the most unusual conditions prevailing over the last two years.
Since the current year is an election year in lot of states and the next year is national elections, the government is full on in election mode. They may very well make two people pleasing/election winning budget which boost spending rather than look at the economic needs of the country.

[xway]

I have zero expectations now from this government now, having enough cock and bull stories over the years.

Note I have no political inclination of affiliation to any party and am just putting the facts as happened

Inflation and Taxes were to be reduced due to -

- political majority in 2014 / nothing happened
- getting black money from abroad / nothing happened
- make in india boom / nothing happened
- demonitization / nothing happened
- GST rollout / nothing happenened
- Post Covid / nothing happened


Only taxes have increased manifolds, inflation is beyond control, prices of essentials have gone through the roof. Food, commodities and fuel prices have doubled and even tripled in many cases. Even electronics like laptop and mobiles and our beloved automobiles have become expensive like never before.

So, zero expectations. At best some scheme will be tom tomed and splased across media as big master stroke which in reality will be a dud.

Sorry for ranting out like this but this is how it stands.

[Vishal.R]

As a salaried tax payer, I have ZERO expectations from this budget.

I don't blame any political parties here but our political system (Society actually) has obsessed with populism so ALL parties have to follow that.

In recent past, We have observed that any political leadership who tries smallest of reforms which may potentially affect a section of politically influencing group have to bite the dust.

Unfortunately I don't belong to any politically significant economical group, so no one is bothered about.

Even in our educated elites, socialism (borderline economical communism) has become fashionable.

[iamahunter]

Given the tax structure India has been following, I am very much sure that the government(any of them) do not give a care about the working class. They know that the working class are laborers, and do not really have the guts to raise their voice at that level, at least the majority of them won't. Some would raise their voice for a few days, but it will subside as they would want to go back to work to fulfill their loans and other liabilities.
Also the tax saving options for working class are way less than that of business class.

• So having said this, I just hope the budget does not add another tax slab. Given the recent job switching market and salary hikes this may be an agenda.
• Does not eradicate the old tax regime.
• Do not increase the tax on stuff required for WFH, mainly computer and internet related hardware.

More of less, I am not hoping for anything majorly positive, at the same time I hope that things do not get any more worse.

[BigB]

Almost 100% of the suggestions to the Finance Minister before budget are of reducing the taxes or increasing the exemptions and ofcourse increasing the Capex by Central Government. These suggestions are of no use unless it includes the amount that the exchequer will lose because of implementing these, along with suggestions on how to make up for the revenue shortfall.

Just like individuals, take up suggestions from any industry it will always revolve around increasing the exemptions for the self or its customers.

Some examples.
Real Estate: Raise home loan interest deduction for tax rebate
Gems & Jewellery: Reduce customs duty on gold
Chemical Industry: Incentives For Exports
Pharma: Want more R&D Sops… etc etc

If we see on standalone basis most of them are correct. However, holistically it is impossible to implement all.

Also consider the amount of subsidies which runs into lacs of crores yearly. We also need to understand that the amount of tax payers (not filers) is very low in our country. The room the Governments has to play, is very restricted. I believe the Government has to loan lacs of crores form the market every year leading to high interest rates for private sector.

I strongly believe we need to taper down our expectations from budgets irrespective of who so ever is running the Government.

[Equus]

Coming out of the pandemic, this budget has significant importance. If it can help create schemes to generate much higher employment, it would be a memorable one.

On Automative sector, I hope they do something for hybrid EV in terms of lower duty structure (based on distance covered in pure EV mode at lower speeds, micro hybrid/re-gen, etc). ICE only cars can be retained at the existing structure. Improve the charging infrastructure on highways - provide some tax breaks, etc

[bht]

As a salaried tax payer, I do not have any expectations ( as it has been over last few years).

All depends upon the outcome of the state elections this year, 2023 budget might be a populist one before 2024 elections.

[m8002?]

What we need is a simplified and stable tax structure ( both direct and indirect ).

Tinkering with tax rates, exemptions, relief, etc in every budget servers no purpose other than satisfy the ego of the finance minister( ministry ). I dont think any other large economy makes such a pomp and show out of the annual budget!! Just fix a reasonable tax rate and make the standard deduction and bands linked to the inflation index.

I was glad that they removed the railways budget. Hopefully, even that ministry and the Airlines ministry are dismantled and brought under the Ministry of Transportation.

[DonHyd]

If I were in the finance minister's post, I would implement the following changes.

1. Abolish all the existing taxes except import taxes.

2. Whatever the taxes the government is receiving at present(last 5 years average), the same amount(adjusted for inflation and requirements over next few years) will be recovered from the people by taxing only few items. They will be cigars, alcohol, fuel, lottery tickets and gold. I don't like taxing fuel but that is the only way to tax everybody.

3. Clear the NPA mess in one stroke, come what may. Declare every single defaulter's name to the public, confiscate and auction their assets, and if still they owe money, no arrests, just engage them in manual labor in the harshest conditions providing only basics. I am sure, all willful defaulters will pay up.

4. Abolish all the freebies across the country. Those who wish to avail freebies should compulsorily serve in the armed forces or police in any capacity for five years.

Oh. Someone disturbed my sleep and thus my dream. When I dream again, I will update the list.