Tax exemptions to salary raise - what has budget 2021-22 in store for us?

Tax exemptions to salary raise – what has budget 2021-22 in store for us?

Author: Web Desk

Shaukat Tarin, the fourth finance minister in the PTI government, will present his first budget in parliament less than a week from now, on June 11. The public can expect several changes in the previous policies with respect to salaries, taxes and income. It is highly likely that tax cuts and exemptions will be reduced. Moreover, salaries of employees may increase by ten to fifteen percent, the final percentage will be revealed on June 11.

Increase in salaries
The total volume of the budget for the next financial year will be around Rs 8 trillion. The salaries of the employees are expected to increase by ten to fifteen percent. The volume of the economy will reach Rs 52.057 trillion. The economic growth rate will be 4.8%, Rs 3.06 trillion will be spent on loans and interest, tax exemptions are likely to be abolished for various sectors.

No tax exemption
Income tax exemptions of more than Rs 20 billion are likely to be abolished in the next budget. There are proposals to abolish income tax rebates of Rs 4 billion on salaried class, medical allowances, corporate agricultural income profits and businesses in the tribal areas.

Budget deficit
According to FBR sources, it is recommended to abolish income tax exemption for social security institutions, LNG terminals and operators, while the budget deficit for the next financial year could be Rs 2.915 trillion at 5.6%.

Defense budget Rs. 1400 billion
Annual development program will be set at Rs. 0.9 trillion. The development budget of the provinces will be Rs.1 trillion, Rs.0.53 trillion can be set aside for subsidies. The defense budget is likely to be more than Rs 1.4 trillion.

Income
In the next budget, tax revenue could be Rs 5.82 trillion and non-tax revenue Rs 1.42 trillion. Amnesty for the construction sector is likely to be extended. With the consent of the IMF, the construction amnesty scheme is likely to be extended to September or December 2021. Under the ordinance, the period can be extended by 3 or 6 months. 350 projects worth Rs 0.14 trillion were registered under the scheme for the construction sector and the deadline for this scheme is June 2021.