Budget 2021 is all lined up to be produced on February 1, 2021, and all eyes are glued to the upcoming announcements by the government be it the business class, professionals or the salaried individuals. Where Budget 2020 was declared as an aspirational budget, Budget 2021 is expected to be an executionary one in view of economy-revival, as required after the worldwide pandemic took place in 2020.
The Prime Minister has announced Rs 1000 crore seed fund in the recently held international summit- PRARAMBH, for the startup sector, ensuring there would be no shortage of funds for the sector. The budget 2021 should be providing adequate policy measures to let such funds be tapped in an appropriate manner.
Relaxation in FDI policy measures to deal with issues faced by startups, especially with the retreat of a lot many Chinese investors, is definitely something which the startups of the country are eagerly anticipating in the Finance Minister’s budget speech on 1st of Feb.
Expectations in the increase of deduction limit under section 80C of Income Tax Act, 1961 for various income tax saving options, increase in exemption limit of interest on savings account under section 80TTA and increase in the deduction for interest on housing loan of self-occupied property continue to be the most sought from the middle-class section of the country in the upcoming budget from the government in centre.
The changing lifestyles of the present generation clearly depict a fall in life expectancy of a normal individual. Also in view of COVID times, the need to secure health insurance has become of utmost importance and the consequent expectation to increase in the limit of insurance premium under section 80D, along with the introduction of allowance for medical expenditure for dependent family members. Further, for expenditure in case of female maternity period and the need for some allowance in regard to the same should be considered by the government in the upcoming budget.
Along with the above, there has been a paradigm shift in the working culture after the pandemic happened. Work from Home policy became of one of the most common ones. Accordingly, a deduction to meet the expenses incurred to set up a workplace at home should be introduced while calculating the taxable income of the salaried employees.
With COVID-19 pandemic having disrupted the biggest of economies worldwide, it becomes quite imperative for the government to provide a boost to the infrastructure in the health sector to build the nation’s capability to deal with such emergent situations better. In this view we can expect, the government to give 150% deduction for the CAPEX done to expand health infrastructure in areas where there is no vivid reach.
Tourism, Hospitality & Entertainment Sector
Tourism, Hospitality & Entertainment sector has been the worst affected by the unleash of Coronavirus in the world. With lockdown for massive periods, the industry has been downtrodden to a huge extent. In such a scenario, a better allocation of funds to these sectors can be a welcome move in the upcoming budget.
Real Estate Sector
There has been definitely a phase of lower cash flows in the hands of the common man and with lower investments in the various sectors, real estate has faced the most due to the same. In such scenarios, it seems very difficult to achieve the dream of the Modi government of affordable housing for all by 2022. So the budget 2021 must encompass the same while laying down measures to boost the Real Estate sector.
Technology and IT sector
As also envisaged in the previous budget, the government plans to make India technologically robust country in order to make India competitive enough in the global market. There have been a lot of initiatives by the government in this direction. However, the digital infrastructure in the country still lags behind from what is required and thus a lot of funds are expected to be allocated in building a robust digital infrastructure for our country.