The Government of India will announce its annual budget on February 1, 2019. It will be the current government’s last budget before the general election. Hence, the public’s expectations from the budget are flying high.
We surveyed our esteemed clients to find out what the general public expects from the budget this year. Here is what we found.
In last year’s Union Budget, the Government removed two popular tax benefits namely Conveyance Allowance and Medical Reimbursement. But, it was done with good intentions. The Government replaced them with something new, a flat tax deduction and called it Standard Deduction.
This year, the common man wants the Government to increase the upper limit of the aforementioned tax benefit. Many people feel that a Standard Deduction of Rs 40,000 is good but falls short in giving significant tax relief. Hence, they expect the Government to double it.
Nobody wants to pay tax happily. The general sentiment is like this because we often take it as a burden rather than our responsibility. With the rising inflation, there is a growing concern in the middle-class society concerning the Income Tax slabs.
The Government optimised the tax rate for Rs 2.5 lakh to Rs 5 lakh slab by slashing the tax rate from 10% to 5%. But people with income above Rs 10 lakh are still charged a heavy tax rate of 30%. This rate has remained unchanged for quite some time.
Keeping in mind that the buying power of money reduces with time, the Government should widen the 20% tax slab to cover people earning up to Rs 15 lakh.
Section 80D of the I-T Act gives tax benefit on the amount paid as the premium of health insurance policy. Senior citizens get one more benefit. If they don’t have health insurance to cover their medical expenses, they get a tax deduction of up to Rs 30,000.
This year, people want this valuable tax benefit to be extended to every age group. This will help the taxpayer in reducing the medical cost and provide great relief to the average taxpayer.
As of now, people get tax benefit on the interest they pay on education loan under section 80E. But, people also expect the Government to give tax benefit on the principal repayment which forms a considerable part of the EMIs.
The Government may also consider providing a special tax deduction at par with the NPS, which will be over and above the 80C limit of Rs 1.5 lakh.
Section 80C of the IT Act covers the tax benefits on the most popular investment options. A significant raise in the deduction’s upper limit has been long overdue. This budget season, the common man expects it to increase from Rs 1.5 lakh to Rs 2.5 lakh.
The masses highly appreciated the tax benefit u/s 80EE for the first time home buyers. People looking to buy a new house soon are looking forward to this tax deduction but with a higher tax benefit of Rs 1 lakh instead of Rs 50,000.
Section 24 of the I-T Act gives tax benefit on interest paid by home loan takers. However, there is a limit on the deduction of this loss from the income head ‘Income from other sources’. People cannot claim more than Rs 2 lakh as a tax deduction in a year.
On paper, this number looks impressive, but the buyers pay a much higher amount of money as interest. Hence, they expect the Government to remove the limit on this tax benefit.
Do you agree with our survey result? If not, comment below and let us know what’s your expectation from this interim budget.
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