Thewill be presented on February 1. There are hopes of many attached to it. However, middle class has it’s own expectations, with tax slabs and home loan subventions, reports Economic Times.
If the minimum limit of taxable income is increased, it will not only benefit taxpayers at the bottom but also middle-class youth who are starting out as employees. Currently it is Rs 2.5 lakh.
A restructuring of tax slabs will be a big relief for the urban middle class. Currently, 10 per cent tax is charged on annual income of Rs 2.5 lakh to Rs 5 lakh, 20 per cent on Rs 5 lakh to Rs 10 lakh and 30 per cent on income above Rs 10 lakh. The first two slabs can be widened or taxed at a lower rate.
Deduction under Section 80C of the I-T Act is allowed from Rs 1,50,000 to Rs 3,00,000. Increasing the limit can boost household savings which can ultimately get invested and power growth.
Salaried employees enjoy exemption from tax on several allowances/benefits that the employer provides such as children’s education, conveyance, medical reimbursement, house rent and leave travel.
Arun Jaitley can change the existing exemption limit of Rs 3, 00,000 for senior citizens (60 years to less than 80 years) and Rs 5, 00,000 for super senior citizens (80 years and above) to Rs 4,00,000 and Rs 6,50,000 respectively.
The subventions on home loans offered by PM Modi in his New Year’s Eve speech are targeted at buyers in Tier 3 cities. In the upcoming Budget, the finance minister can offer interest subvention on larger amounts of loan which will benefit buyers in big cities and other urban areas.