The very first 4-year block commenced in 1986 and covered the years till 1989
LTA is the payment made by the employer to the employee for expenses incurred on leave travel anywhere within India. As per present tax provisions, LTA exemption is provided for two travels undertaken in India in a block of four years. These provisions were introduced many e for providing higher benefit in terms of frequency of travel and coverage of eligible expenses.
Expenses such as fuel and maintenance of the vehicle, telephone, and communication, books and periodicals, salary for staff employed as a driver or other support staff, etc
Considering the changes in standard of living and increase in spending power of taxpayers, it is suggested to provide LTA exemption on annual basis. Further, in many situations, expenditure towards stay in a hotel, food, etc. forms a major part of journey costs and hence, the same could also be considered while calculating LTA tax exemption. This proposal would also promote the tourism and hospitality sector which is one of the most affected sectors due to the pandemic.
As per the present limits, salaried employees are allowed a standard deduction of Rs 50,000 from the taxable salary income. The rationale of providing such standard deduction is to cover many expenses incurred by the employees during employment. However, this limit does not absorb all the expenses that an employee may incur during a year payday loans in CT. One may also compare the case of a self-employed professional versus a salaried individual. , are a few expenses which are routinely incurred by both salaried individuals as well as self-employed professionals.
However, while the self-employed professional is eligible to claim all expenses incurred for exercising her profession, a salaried individual is only entitled to a flat standard deduction of Rs 50,000. Hence, the government should consider increasing the standard deduction to at least Rs 1,00,000 or link the same to the salary threshold, so that the deduction for expenses is on a more equitable basis for individual taxpayers.
It is expected that the limits of various exemptions like child education and hostel expenditure etc. be increased considering the present inflation index.
Most of the deductions and exemptions discussed above are not applicable where an individual chooses the new personal tax regime introduced by the Finance Act 2020. However, a large section of the salaried individuals makes investments and expenses which are covered under the old tax regime, and therefore opting for the new regime is disadvantageous. Therefore, if the government wishes to encourage more individual taxpayers to opt for the new tax regime and simplify tax administration/ compliance, the tax slabs need to be further rationalised so that the new regime is more beneficial.
To sum up, considering the difficulty of taxpayers amid the third wave of the pandemic, Union Budget 2022 is being looked upon as a ray of hope which can bring some sort of relief for the taxpayers. The individual taxpayers of the country are expecting significant reliefs which can be incentivised in actual monetary terms.
Certain components of salary are eligible for deduction under Section 10 of the Act, subject to limits that were decided long back and have virtually become redundant due to inflation
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The COVID-19 outbreak has introduced a new arrangement of working from home for many salaried class taxpayers. To provide a better working environment to employees at home, organizations are providing certain facilities such as the provision of office equipment and furniture (printer, chairs, desks, and other accessories, etc.) to their employees. Though such equipment/ furniture is for the purpose of exercising employment, an element of personal use can be construed as the same is provided at the employee’s residence. Hence, it is expected that the expenses incurred towards such furniture and other home office set-up costs should be specifically exempted from tax in the hands of employees.