New Delhi, Jan 31: Finance Minister Arun Jaitley will present the Union Budget 2018 on Thursday in Parliament. This will be the last full-fledged budget for the Modi government before the 2019 general elections. This is a very important budget for the economy as the government might announce measures to enhance public saving and investment. The government may also announce decisions that spur growth stunted by big-ticket economic reforms. The most keenly-watched aspect of the budget will be the decisions on individual taxpayers. It is widely reported that the government has a lot in store for income tax payers. (Full Coverage) Also Read - Finance Act 2018 Clarifies Applicability of Standard Deduction For Pensioners
It was reported that the government might increase the tax exemption limit of Rs 1.5 lakh to Rs 2 lakh. The limit was last increased in 2015 from Rs 1 lakh to Rs 1.5 lakh. Last year, some minor relaxations were given to small tax payers. However, the highest slab for people with income above Rs 10 lakh remained a steep 30 per cent apart from surcharges. Also Read - List of Things That Will be More Expensive From April 1, 2018
Long-term capital gain tax on equity might dent individual taxpayers’ coffers. There are reports that government was mulling to levy this tax to replenish national exchequer, which faced a short-fall in revenue with the implementation of the Goods and Services Tax (GST). The short-term capital gains or units of mutual funds sold before one year are taxed at 15.45%. Not taxing the long-term gains was making the government lose Rs 50,000 crore annually. On Thursday, the government might like to change that. Also Read - Armed Forces Facing Shortage of 52,000 Soldiers, Army's 21,000 Posts Vacant: Govt
Taxpayers would want Arun Jaitley to announce an increase in the exemption limit of income tax. Jaitley had not increased the limit last year. However, this year, chances are that he might increase the limit from Rs 2.5 lakh to Rs 3 lakh.
SBI’s Ecowrap report said that if the exemption limit of interest payments under housing loan is increased from Rs 2 lakh to Rs 2.5 lakh, the dent to the exchequer will be a paltry Rs 7,500 crore but 75 lakh people will benefit from the move.