The document summarizes key changes expected in the Indian budget that would impact salaried individuals and provides analysis of the impact. It discusses potential increases to tax deductions limits for investments, home loans, health insurance. It also summarizes the standard deduction introduced for salaried individuals, its increase over time, and its applicability for senior citizens. Key income tax highlights from the recent budget that provide relief to salaried taxpayers and incentives for home buyers are also outlined.

1. PRESTIGE INSTITUTE OF MANAGEMENT, GWALIOR
FINANCIAL MANAGEMENT
MBA -2ND SEC "B"
TOPIC- “BUDGET FOR SALARIED INDIVIDUALS: IMPACT ANALYSIS”
PRESENTED TO:
DR. TARIKA SINGH
PRESENTED BY :
SHUBHAM NANDI

2. INTRODUCTION
The Union Budget of India, also referred to as the Annual Financial
Statement in Article 112 of the Constitution of India, is the annual
budget of the Republic of India.
The Government presents it on the first day of February so that it
could be materialized before the beginning of new financial year in
April.

3. 4 KEY CHANGES INDIAN SALARIED MIDDLE CLASS TAXPAYERS EXPECTED THIS YEAR

4. 1. Increase the
upper limit of
Section 80C
2. Tax
deductions for
those working
from home
3. Hike tax
rebate on
housing loans
4. Increase the
upper cap on
health
insurance
premium
 Considering the inflation in the recent past, the government may increase this upper limit to up to 2.5-3
lakh.
 The increase in the deduction limit under Section 80C was last increased in 2014 and an upward revision
is long overdue.
Information technology giants to banks, companies across the globe, have shifted to 'work
from home' policy in last one year.
He salaried individuals have to incur additional expenses due to remote working. The
allowance received by the employees, such as conveyance allowance, has become taxable in its
entirety for those who are working from home.
At present, an individual gets 1.5 lakh exemptions under Section 80C and 2 lakh under 24B
for home loan.
"The tax rebate on housing loan interest rates under Section 24 should be increased to at
least 5 lakh to generate healthier housing demand, most notably in affordable and mid-segment
housing," said Anuj Puri, chairman, ANAROCK Property Consultants.
The view of this situation, the government may increase the upper limit on health insurance
premiums under Section 80D.
As per the provisions of section 80D, an individual can claim an exemption of up to ₹25,000
( 50,000 or 75,000 or 1 lakh if bought for parents) on the premiums paid for the medical insurance
of self and family.

5. STANDARD DEDUCTIONS
Under United States tax law, the standard deduction is a dollar amount that
non-itemizers may subtract from their income before income tax is applied.
Taxpayers may choose either itemized deductions or the standard deduction,
but usually choose whichever results in the lesser amount of tax payable.

6. STANDARD DEDUCTION FOR SALARIED INDIVIDUALS
It is a deduction allowed to salaried individuals. It is mainly a flat amount that is subtracted from
the salary income before the calculation of the taxable income of an Individual.
The deduction was reintroduced by Finance Minister Arun Jaitley in Union Budget 2018. The
introduction of the standard deduction led to the removal of the existing annual transport allowance
of Rs 19,200/- and and medical allowance of rs. Rs 15,000/-.
The limit of standard deduction was raised from Rs. 40,000/- to Rs. 50,000/- in the Union Budget
2020. ( Salaried Individuals can claim a deduction of Rs. 50,000/- from Assessment Year 2020-21.)

7. 0
10,000
20,000
30,000
40,000
50,000
60,000
2018-19 2019-20 2020-21 onwards
Standard Deduction u/s 16(ia)
Standard Deduction u/s 16(ia)
GRAPHICAL REPRESENTATION OF
STANDARD DEDUCTION

8. IMPACT ON MIDDLE CLASS FAMILY
 Standard deduction for salaried persons raised from Rs.40,000 rupees
to Rs.50,000.
 Individuals having taxable income up to Rs.5,00,000 to get full rebate
of the tax.
 TDS threshold on interest on bank and post office deposits raised from
Rs.10,000 to Rs.40,000 Rupees.
 Section 54 Capital Gains exemption now available on purchase of two
house properties (Once in a life time).

9. STANDARD DEDUCTION FOR SENIOR CITIZENS
According to the income tax law, Senior citizen (pensioners) are also treated as
salaried, so they are also qualified for the standard deduction of 50,000.
According to the tax department, the pension received from the formal employer is
treated as salaried.
In Budget 2021 Senior Citizens who are 75 years or above will be exempted from
filing Income tax return.
In Union Budget 2021, Senior Citizens above the age bracket with only interest
and pension income will not have to file income tax returns.

10. INCOME TAX HIGHLIGHTS FOR SALARIED INDIVIDUALS, TAXPAYERS
1. Three month reduction for ITR processing
2. Incentive for affordable house buyers
3. Ensuring timely EPF contribution by recruiters
4. Exemption for Leave Travel Concession (LTC)
5. Safe harbour incentive for residential home buyers,
developers
6. Relief for Dividend gained

11. 1. Three
month
reduction for
ITR
processing
2. Incentive
for
affordable
house buyers
In order to bring certainty in income tax proceedings at the earliest, the central
government budget 2021 has proposed to reduce the time limits for general
assessment or processing of income tax return by three months
Also for filing of income tax returns. Means the income tax department will have
to process the ITR by 31st December 2021 instead of 31st March 2022. Photo:
Reuters
 In order to incentivise purchase of affordable house, the Union budget has
proposed to extend the eligibility period for claim of additional deduction for
interest of Rs 1.5 lakh paid for loan taken for purchase of an affordable house
to 31st March 2022.

12. 3. Ensuring
timely EPF
contribution
by recruiters
4. Exemption
for Leave
Travel
Concession
(LTC)
 Delay in deposit of the contribution of employees towards various welfare funds by
employers result in permanent loss of interest/income for the employees. In order to ensure
timely deposit of employees’ contribution to these funds by the employers.
 The union budget has proposed that the late deposit of employees’ EPF contribution by
the employer shall never be allowed as income tax deduction to the employer. Photo: EPFO
Twitter/Pixabay.
In order to provide relief to employees, it is proposed to provide tax exemption to the amount
given to an employee in lieu of LTC subject to incurring specified expenditure.
Means the Cash Voucher Scheme launched for the central government employees has been now
extended to all earning individuals.

13. 5. Safe harbour
incentive for
residential
home buyers,
developers
6. Relief for
Dividend
gained
 In order to incentivise home buyers and real estate developers, the union budget 2021 has
proposed to increase safe harbour limit from 10 per cent to 20 per cent for the specified
primary sale of residential units.
In order to provide relief to taxpayers, advance-tax liability on dividend income shall arise
only after the declaration/payment of dividend.
The dividend paid to Real Estate Infrastructure Trusts or Infrastructure Investment Trusts
(REIT/Inv IT) shall be exempt from TDS. It is also proposed to clarify that deduction of tax on
incomes including dividend income of Foreign Portfolio Investors may be made at treaty rate.
It is also proposed to exempt dividend payment from levy of Minimum Alternate Tax (MAT)
for foreign companies if the applicable tax rate is less than the rate of MAT.

14. THANK YOU