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Budget 2022-23: Some tax exemptions expected to phased down

Budget 2022-23

FinMin looking at the possibility of rationalizing capital gains tax rates.

Certain direct tax exemptions for business and personal taxpayers may be phased down over time, according to the Centre. This is one of the tax proposals being considered for the 2022-23 Union Budget. According to the government’s internal evaluation, the percentage of corporations and individuals changing to the new exemption-free tax regime has been highly encouraging, and Budget-makers expect many more to do so in the future years. 

The Union Budget 2022-23 is a chance to streamline the much-needed policy measures, as it comes to terms with the urgency of supporting the lives and livelihoods of those who have been severely impacted by COVID-19. It is critical to look back while looking forward. It’s important to remember that, prior to the worldwide pandemic’s unprecedented contraction, which the Reserve Bank of India (RBI) referred to as a “historic technical recession,” the world’s major economies, including India, were not experiencing a period of stable economic development. Following that, a declining trend in consumption and investment began, with the global pandemic interrupting normal economic operations and causing unimaginable losses in lives and livelihoods.

COVID-19 and a crisis of historic proportions

The world economy declined by 3.2 percent in 2020, according to the International Monetary Fund (IMF), but was expected to grow by 6% in 2021. In 2019, the global economy grew by 2.8 percent. These data should not be construed as encouraging or reassuring of a healthy growth trend. Even more concerning is the perception of their impending consequences, which cannot be explained only through data and analysis. India, as one of the world’s most important economies in the twenty-first century, cannot afford to be isolated and follow the route of protectionism. In fact, it should keep interacting with the rest of the world in order to reap the benefits of convergence.

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By TIS Staffer
the authorBy TIS Staffer

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