Budget 2023 is just under two months away. While it’s a given that small investors always look for more tax deductions and respite on income tax rates, some fear the Union budget may increase the tax burden to augment revenue. However, Deepak Chhabria, founder and managing director of Axiom Financial Services, says, “Investors prefer predictability and stability in tax laws. So the government should not make big changes in taxation which would unnerve investors. Instead, a rationalisation of tax rules with inbuilt incentives should attract investments.”
Increased tax shelters
Inflation has been ruling high for almost a year and there are expectations that it will take some time before it cools, and the hope is that the government takes note of this and offers some respite to investors.
Deduction under Section 80C has been capped at Rs 1.5 lakh and there are many instruments including contributions to the Employees’ Provident Fund, public provident fund, Sukanya Samriddhi Yojana, equity-linked saving schemes (ELSS), National Saving Certificates, tax-saving bank fixed deposits, life insurance premiums along with home loan principal repayments that are eligible for it. The general feeling is that it is high time that the finance minister raises the quantum of deduction.