New Delhi: When the Union Budget FY23 is tabled in Parliament on February 1, the government may propose additional tax benefits to raise citizens' net disposable income in order to encourage demand.
According to a research by brokerage firm KR Choksey, the government is likely to expand infrastructure spending in order to create a multiplier effect and increase job prospects. It may also continue to implement structural changes and increase privatisation in order to attract long-term investments from international institutional investors (FIIs). To encourage demand, the government may consider providing incremental tax incentives to citizens to enhance their net disposable income.
According to the report, the government will place a greater emphasis on tax compliance by increasing its vigilance. In order to enhance GST revenue even further, the GST Council may raise GST rates on a limited number of items and services. Changes to the tax structures of InvITs and REITs are possible, with the goal of bringing long-term capital gains treatment on level with that of other asset classes.
"With strong direct tax collection, we don't see any tampering with the present income tax slabs," the report said, adding that "any incremental tax advantages by the government cannot be ruled out."
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Budget session of Parliament to begin from Jan 31, Budget to be presented on this day