Wishlist seeks clarity on crypto tax, hike in 80C limit, change duty on EVs

As Finance Minister Nirmala Sitharaman presents her fourth Union Budget on February 1 all eyes would be on how the government balances out populist measures while walking the tightrope of fiscal consolidation.

While Indian corporates are expecting some key announcements which will enable them to reset their growth agenda, individual taxpayers are expecting some more disposable income in their hands to invest and consume more. As India works towards a $5 trillion economy by 2025, and with just 2 days to go for 2022-23 Budget, here are the top five market expectations on direct and indirect taxes.

DIRECT TAXES:

1. 80C deduction available up to Rs 1.5 lakh a year be revised upwards significantly;
2. To make the optional concessionary tax regime, which came into effect from April 2021, more acceptable, raise the threshold Rs 15 lakh income for laying peak 30% tax rate;
3. As Web 3.0 unfolds, crypto assets encompassing a wide array of digital assets like non fungible tokens, wrapped asset token etc, will gain tremendous traction. it is being expected that a specialised regime for taxation of cryptocurrency will be introduced in the budget.
4. The burden of the long-term capital gains tax (LTCG), introduced vide Finance Act 2018, has somewhat dented investor confidence. Major economies do not have LTCG tax. In India too, it is expected that LTCG on the sale of Indian-listed equity shares will be exempted as it would boost investment through the stock exchange.

INDIRECT TAXES:

1. Rationalisation of Customs duty structure for EV and ancillary components, renewable energy generation devices and related components is likely.
2. Sector specific concessions for semi-conductor manufacturers with focus on exports is expected.
3. Budget allocations for the expansion of the PLI scheme for sectors such as leather and laminates.