New Delhi: Nirmala Sitharaman will present her first Budget on July 5. Though the interim Budget of February had announced sops, Sitharaman is expected to offer more relief, especially on income tax, said reports. Analysts expect the budget to be pro-growth and tax sops are expected to give a fillip to the economy that has slowed this year. Also Read - AR Rahman Gets Legal Notice From Madras Court in Income Tax Case
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- The tax exemption limit for individuals may be raised to ₹3 lakh, up from the current ₹2.5 lakh, a portal had reported, citing sources. This proposed tax move is likely to put at least Rs 2,500 more in the taxpayer’s hands. Before this, Arun Jaitley, then Finance Minister, had raised personal income tax exemption limit from ₹2 lakh to ₹2.5 lakh.
- Late last year, the Government had hiked the tax exemption limit for lump sum withdrawal on exit from NPS to 60%. With this, the entire withdrawal will be exempt from income tax. As of now, out of 60% of the accumulated corpus withdrawn by NPS subscribers at the time of retirement or reaching the age of 60, 40% is tax exempt and the balance 20% is taxable.
- The Ministry is also mulling raising the tax exemption limit for savings and investments under Section 80C, said reports. As of now, the limit is set to Rs 1.5 lakh. This would ensure affordability to all class of patients, said experts.
- The Union Budget may see the re-introduction of tax-free bonds to raise capital by government entities for infrastructure projects. These bonds are called tax free because the interest earned is not taxed.
- The Centre could also consider raising the threshold limit of Long-term Capital Gains (LTCG) on sale of listed shares and units of mutual funds which is currently at Rs 1 lakh per financial year.