Budget 2017: Will Jaitley cut taxes to make the middle class smile?
After the difficulties thrown up by demonetisation, the Indian middle class is looking forward to Budget 2017, hoping for a personal tax bonanza from Arun Jaitley. As the finance minister prepares to present his third union budget, here’s a look at what Jaitley can do to make the middle class smile
After the difficulties thrown up by demonetisation, the Indian middle class is looking forward to Budget 2017, hoping for a personal tax bonanza from Arun Jaitley.
As the finance minister prepares to present his third union budget, here’s a look at what Jaitley can do to make the middle class smile:
Increase exemption limit
This one ranks very high on every Indian citizen’s budget wish list; increasing the exemption limit by at least Rs 50,000 to Rs 300,000.
Increase deduction limit under 80C
Currently, the deduction limit is Rs 150,000 and the demand is to increase it by Rs 100,000. This will boost household savings and in turn will provide funds to the government for long term investments.
Raise exemption limit for senior citizens
The existing exemption limit for senior citizens is Rs 300,000 and Rs 500,000 for super senior citizens (80 years and above). The wish list is that this should be raised to Rs 400,000 and Rs 650,000 respectively.
Allow higher deduction on home loans
The current tax deduction allowed is Rs 200,000 on home loans on repayment of the principal. The long-standing demand is to increase this limit.
Bring back standard deduction
Bringing back the standard deduction provision that existed in 2005-2006 would bring cheer to the salaried citizens of India. This provision allows a certain percentage of the gross salary to be deducted, the tax is computed on the remaining salary.
Caveat
Government records show that only 24 lakh Indians file taxes with income over Rs 10 lakh per year, so will Arun Jaitley have the fiscal space to include the wish list on personal tax?
