Union Budget 2021: Government’s challenge to cut employees’ salaries, what is the next strategy?

The government is also likely to increase the standard deduction limit in this year’s budget.

New Delhi: In July 2019, Finance Minister Nirmala Sitharaman presented her first budget . At that time, he had increased the standard deduction limit for taxpayers from Rs 40,000 to Rs 50,000. It was started in 2018 by the then Finance Minister Arun Jaitley after 13 years. At that time its limit was Rs 40,000. Now the government is likely to increase the standard deduction limit in this year’s budget as well. Regarding the standard deduction, Arun Jaitley had said, “A salaried person (Rs 76,306) pays on average three times more tax than a non-salaried person (Rs 25,753). Standard deduction is the amount deducted from taxable income (Standard deduction is big challenge for Nirmala Sitharaman in union budget 2021).

People across the country have been working from home since March 2020. This new work culture will make it difficult for the government to distinguish between business income and professional income. Because just like professionals or business, employees have to spend on furniture, computers, internet and other infrastructure for work from home.

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Meanwhile, the government’s standard deduction was also criticized. As a result, the government is becoming tougher on salaried taxpayers than industrialists or professionals. TDS is deducted directly from the salaries of the employees, on the other hand, the traders are exempted from it. The government had said that freelancers or consultants have to spend on office staff, office rent, furniture, materials. So they can take advantage of the deduction. This is not the case with employees, the company pays for them. So this is not an injustice on the employees.

Will there be a discount on furniture and electronic purchases this year?

Corona has now made people’s homes their places of work. For this, the employees have to set up an office in their house. This requires investment in office rooms, laptops, systems, internet, other electronic items and furniture. So with this in mind, the question now is whether the government will increase the standard deduction limit.