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December 8, 2022

Know 10 proposals for Individuals in ICAI Pre-Budget Memorandum – 2023 on Direct Taxes

by CA Shivam Jaiswal in Income Tax

Know 10 proposals for Individuals in ICAI Pre-Budget Memorandum – 2023 on Direct Taxes

1) Minor Income

At present income of minors included in the hands of parents is exempt to the extent of Rs.1500/- . The average expenditure to meet cost of a minor’s education/health/living expenses has gone up considerably, suggested to be raised Rs. 10,000/-.

2) Grandfathering provisions for shares received by way of inheritance

While grandfathering as on 31 January 2018 is available for listed shares acquired prior to 1 February 2018, there is no clarity where shares are received by way of inheritance, propose to make them eligible

3) Deduction to salaried – Payment for notice period

Amount reimburse for Notice Buyout should not be included in Income

4) Regular enhancement of standard deduction

Salaried employees are currently allowed standard deduction u/s 16 @ Rs 50,000 may be enhanced to at least Rs. 100,000

5) Expenses incurred due to COVID19/lockdown/Work from home

Reimbursement should not be included in the salary and exempt

6) Deduction of interest from house property

Pre EMI interest is allowed for deduction in five equal instalments from the year of completion of construction. It is suggested to remove the said hardship by allowing deduction of pre EMI interest in the year of payment of interest

7) Raise in allowable expenses in the form of interest on capital and remuneration to working partner

Remuneration for working partner be changed at Rs 1,80,000 per annum per partner or 90 % of book profits for first Rs 10,00,000 of book profits and 75 %remaining book profits.

8) Section 44AD – Monetary limit for presumptive basis

It is suggested that due to growth of economic activity , the rate of 6% may be reduced to 5% for certain specified contractors and turnover ceiling may be increased to Rs. 5.00 crores for Infrastructure Industry

9) Section 44ADA – Special provision for computing profits and gains of profession on presumptive basis

It is suggested that the threshold limit of Rs 50 lakh may be raised appropriately (say to at least Rs 1 crore) and estimated income rate reduce from 50% to 30%

10) 54EC Bonds

Limits to be allowed so that time limit for investment in specified bonds may be allowed upto the due date of filing of ITR from presently 6 months

11) Section 80C – Various suggestions

PPF be increased to Rs. 3 lakhs The quantum of deduction under section 80C be increased from Rs 1,50,000 to Rs 2,50,000

12) Interest on deposits in savings account

Section 80TTA deduction of 10k must be revised upward and 80TTB must be revised from 50k to upward

Source :

  1. https://resource.cdn.icai.org/72369dtc58261.pdf

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