Budget 2021 Will Not Introduce Any New Tax Deduction: Taxmann

Mark your calendar if you are excited about the Budget 2021 because on this day Finance Minister Nirmala Sitharaman will present the Union Budget for the Financial Year 2021-22. It is expected that this budget will be focused on how the government plans to revive the contracted economy for the current fiscal year at 7.7 percent.

Last year the Union Government introduced several schemes such as Atma Nirbhar Bharat Abhiyan and a production-linked incentive scheme for the manufacturing sector as a part of reviving the economy.

However, to fund these schemes, the government has to invest a huge amount in them and even at a time when the revenue collection is really under pressure. In this hard time, research and advisory firm Taxman expect the government not to announce any new tax deduction in this budget.

Taxmann said “Where on one hand the government has to incur a huge sum to finance these packages, on the other hand, it has suffered a loss of revenue as some industries have been impacted severely by the pandemic. Thus, it is not likely that the government may increase the basic threshold limit or announce any new tax deduction in the upcoming budget,” in its pre-budget recommendations to the government.

In last year's Union Budget, the government announced a new and simplified personal tax regime consisting of revised income tax slabs rates. As per the new tax structure, People earning up to ₹ 5 lakh yearly will not have to pay any tax, whereas people earning ₹ 5-7.5 lakh will have to pay only 10% tax.

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