New Delhi, Jan 2: According to a survey conducted by tax consultant Deloitte, 58 per cent people have demanded that Finance Minister Arun Jaitley should double the basic income tax exemption limit to Rs 5 lakh per year. The survey also highlighted the demand to raise the ceiling for claiming deduction under Section 80C to Rs 2.50 lakh.
Almost all the respondents demanded that exemption limit should be raised substantially, while a total of 58 per cent were in favour of raising it to Rs 5 lakh. The Deloitte survey also said that 71 per cent respondents want “the limit of the Section 80 C to be increased to Rs 2.50 lakh, from Rs 1.50 lakh.”
“It will place more money in the hands of consumers resulting in increase in demand pick-up. Also, the increase in the slab limit will kick-start savings which will ultimately lead to increase in investment in the system,” stated a Pre-budget Expectations Survey Report by Deloitte
According to the survey “Given the increase in income levels and inflation, the existing limit is low. Increase in limit will help channelise household savings into productive avenues such as insurance, provident fund, equity and the like which will in turn help boost infrastructure spending and job creation.”
Also, to bring uniformity in the National Pension Scheme (NPS) tax treatment, 88 per cent of the respondents demanded full tax exemption for withdrawal of NPS. “The government has positioned NPS as an alternative to PF. Therefore, to bring parity and incentivise employees to be part of NPS, it must be brought under the EEE regime,” the report said.
The Union Budget 2017 will be presented on February 1 by Finance Minister Arun Jaitley. The government has already started the budget-making exercise for fiscal year 2017-18 by issuing the customary budget circular in September. In November 2016, PM Narendra Modi had given hints about the advancement of Union Budget. Since PM Modi demonetised the country’s two high value currency notes on November 8, which Narendra Modi continues to believe was a well-thought decision and that people will continue to put-up with, a bundle of friendly announcements are expected in this year’s Union Budget.
In the New Year message to the nation, Finance Minister Arun Jaitley had also indicated that the year 2017 will witness indirect tax reforms and further growth. It can be expected that the budget will focus on giving Indian economy a boost.
Apart from the demands made, here’s all we can expect from Budget 2017:
- As per the reports originated from a meeting between Prime Minister Narendra Modi and well-known economists, the post-demonetisation union budget is likely to be citizen-friendly to push the economic growth.
- The Budget might also focus on strategies to double farmers’ income by the year 2022. A farm package in the budget can also be expected to give a boost to the rural economy.
- The Budget is also likely to offer incentives and packages since demonetisation has suppressed the demand of various commodities and has also reduced flexible expenses.
- Prime Minister Narendra Modi’s Startup India programme may also get a boost with the industry department listing up tax allowances on employee stock options, unlisted securities and exchangeable instruments. Apart from this, the other initiatives by PM Modi such as Start-up India, Make in India might also get a mention in the Budget 2017.
- Demonetisation has hit the business in the second part of the third quarter and if the things aren’t balanced, it might continue to affect the business in January-March quarter too. Taking this in consideration, the budget is also expected to be business-friendly.
- The Budget 2017 is also likely to announce extensive cuts in income tax, both personal and corporate giving a boost to both consumer and business sentiment.
- Now that rail budget has also been integrated with the Union Budget, the government could focus on infrastructure.
- The Budget is also likely to focus on solar, wind power and highways and inland waterways.
- Digital and cashless is also expected to be a highlight of the Budget since these two have extensively been used since demonetisation. Concessions and incentives can be expected in digital transactions.
- Apart from this, Finance Minister Arun Jaitley already clarified the government would not impose tax on long-term capital gains.