As per the Model Code of Conduct laid down by the Election Commission of India, though the incumbent Govt. cannot introduce drastic policy changes to appease the masses to garner votes, there are a few expectations from the Interim Budget that will be presented on the 1st Feb 2019.
Most of these expectations revolve around benefitting the middle-class section of the population. Few of the expectations from the Interim Budget are as below:
- Increase in the Basic exemption limit (currently Rs. 2.5 lakhs). There is speculation that the Basic Exemption Limit would be increased to Rs. 3 lakhs. Similar benefits are also expected to be extended to senior citizens (60 to 80 years) and Super senior citizens (above 80 years).
- Increase in the upper threshold for deduction for specified investments under Section 80C from Rs. 1.5 lakhs to Rs. 2 lakhs.
- Increase in the cap/upper limit for deduction on interest on housing loans (currently Rs. 2 lakhs for self-occupied property) in view of the growing prices in real estate.
- Increase in the exemption limit for gains of over Rs. 1,00,000/ (for listed securities) in a financial year in order to benefit a growing number of small investors.
- Last year’s budget reduced the tax rate for the slab of Rs. 2.5 lakhs to Rs. 5 lakhs from 10% to 5% leaving a considerable difference between the tax rate applicable for the aforementioned slab vis-à-vis the succeeding slab of Rs. 5 lakhs to Rs. 10 lakhs, where the tax rate is 20%. Some rationalisation is expected on this front.
- Reduction in GST for health insurance premiums especially for retail policies.
- So far as corporate tax rate is concerned, since there has been a reduction in the past years already, a further reduction is unlikely.
- Rationalisation of Angel Tax is the need of the hour. Clarity on valuation norms and exemption to startups would be most welcome.
What are your budget expectations? Post your comments below!