Modi government reportedly will announce tax relief. The Finance Minister Nirmala Sitharaman wants to allow some more tax relief on top of Modi 1.0 government’s decision.The demands proposed to lower taxation in the budget session which is expected to benefit those who belong to the middle-income group.
The finance ministry has demanded to increase the overall tax exemption or to introduce tax breaks which in turn will help in reducing household expenses.The government may not accept all the demand but a few changes can be expected this year.
1) Higher tax exemption limit:
Citizens and many industry bodies want the government to exempt tax from the existing figure of ₹2.5 lakh to ₹3 lakh. In 2014, Arun Jaitley has raised personal income tax exemption from ₹2 lakh to ₹2.5 lakh. In a situation where the government is aiming to increase the tax base, such move is highly unlikely.
2) Tax benefits for healthcare:
Industry bodies are asking the government to increase tax saving under Section 80(D) of the Income Tax Act. The concession is expected to increase from Rs.25000. which is applicable for people aged below 60 years It could be raised for people above the age of 60 years. The current limit of exemption for people above 60 years is Rs 50,000.
3) Re-introduction of tax-free bonds:
The 2019-20 Budget may see the re-introduction of tax-free bonds to raise capital by the government for infrastructure projects. The National Highway Authority of India (NHAI) could be an immediate beneficiary of this move.
4) Higher deduction on home loans:
A demand slowdown has resulted in decline of the real-estate sector.The government could offer more tax benefits to buyers which will help in reviving the real-estate sector. People can claim a maximum deduction up to Rs 2 lakh under Section 24B of the Income Tax Act.
Sources: www.livewire.com , www.indiatoday.in