Budget 2023 | Jobs, end of firings, tax cuts, and all that millennials, GenZ look for

Union Budget 2023 is likely to be the last full-year Budget before the 2024 general elections in the country. This gives the government the opportunity to play it out well for the youth of the country.

The population of newly-added and soon-to-be-added taxpayers expects Finance Minister Nirmala Sitharaman to focus on increased capital expenditure to provide adequate educational facilities and employment opportunities to them.

Easing the process of income tax filing, hike in standard deduction, tax reliefs for the gig economy, and increasing the benefits on education loan, are some of the items on the wish-list of the millennials in the country.

For the people falling in the age bracket of 21-26 years, spending on electronic products accounts for a large pie of their total expenditure. Thus, the Production-Linked Incentive (PLI) scheme introduced for smartphones in 2021, giving an incentive support of 1-4 percent over a four-year period, should be revised in Budget 2023, feel youngsters. “The government should look to boost this incentive support to 5 percent,” says Rishi Sharma, 22, a masters’ student at Masters Union School of Business.

In addition, there are several other needs that financial planners and early earners feel need to be addressed in the Budget this year.

Lower income tax slabs and increased deductions amidst layoffs

Being in the recovery phase from COVID-19, and witnessing massive lay-offs in most companies, especially the tech giants, as the world transitions to a new normal, the young working population of the country feels that the government should aid in lowering their financial burden.

“For a working professional, tax rates and deductions are extremely important. They directly impact our in-hand component, which subsequently has a bearing on our consumption (including discretionary),” says Sheetal Kakkar, 24, an MBA student at Indian Institute of Foreign Trade, New Delhi, who has formerly worked with multinationals such as Deloitte and Sattva Consulting. “Hikes in standard deductions and some relief in terms of tax rates are needed to reduce our burden,” she adds.

Tax relief for the gig economy

Many youngsters are driven to pursue their passions in addition to their regular 9 am to 5 pm jobs. Some do it just to live their passion, while others to build a side-income. The early 20s’ population forms a big part of this gig economy in India.

Reliefs in terms of additional tax benefits and deductions available only to them, is an initiative they look forward to.

Waive off capital gains tax on long-term investments

Investment planning is one of the most important decisions young salaried individuals need to make when they start their earning journey. The government, thus, needs to take measures to boost the investing sentiment in the youth of the country.

“One amendment that can be made to do the same is to waive off the long-term capital gains tax on investments which are held for more than three or five years,” says Rushabh Desai, Founder, Rupee with Rushabh Investment Services.

Easing the process of income tax filing

Tax planning is another key task that they have on hand. Many youngsters dread the process of making tax-saver investments and filing income tax returns. This is because of the complexities faced by non-finance graduates in understanding the taxation system once they enter the job market.

“This government has generally focused on simplifying processes ― would be wonderful to see even more of the same, especially when it comes to tax paying. A move towards a situation where the average employee doesn't need a chartered accountant to help out with it, would be great,” says Kritin Syal, 22, who works at a consulting firm.

A more automated tax return filing process, with minute-long explainer videos at every step, can help ease this process for the new taxpayers, adds Gajendra Kothari, Managing Director and Chief Executive Officer, Etica Wealth.

Increased expenditure for better educational and employment opportunities

The proposed increase in education expenditure over the years, should allow the government to extend monetary reliefs and best-in-class advanced educational infrastructure and facilities to students.

“A gradual increase in the corpus set aside for education expenditure in the Budget every year can help us control the brain drain from the country,” adds Kothari.

In addition to this, greater financial support to the manufacturing industry and the start-up ecosystem can help generate multiple job opportunities within the country.