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Budget 2023 | Why there is a need for rationalisation of certain personal tax exemption and deduction limits

The monetary caps on certain exemptions and deductions were fixed many years ago and are long overdue for rationalisation. This will help bring them in line with the high inflationary trends witnessed in the last few years.

January 25, 2023 / 08:53 AM IST
FM Nirmala Sitharaman should consider taking a look at certain income tax exemption, deduction limits

FM Nirmala Sitharaman should consider taking a look at certain income tax exemption, deduction limits

Union Budget 2023 is just around the corner and once again the common man is eagerly waiting to see what’s in it for him from a tax deduction and exemption perspective.

In today’s times of rising prices and increased cost of living, the common man hopes that the Budget announcements would put some additional funds in his hands.

Such additional funds could be generated from measures such as increasing the basic exemption limit, lowering the tax rates, introduction of new exemptions or deductions for expenses and investments, and enhancement of monetary caps on existing deductions and exemptions.

In this article, we will analyse the monetary caps on various exemptions and deductions that were fixed many years ago and are long overdue for rationalisation, to make them more realistic in light of the high inflationary trends witnessed in the last few years.