There is no denying that not only industry, but also the common man’s expectation are penned on the budget. However, there is no denying that the global economic situation is not too favourable and there is tremendous pressure on the government to contain the deficits.
On a personal front, though there are many aspects which need to be considered, one key aspect would be to give impetuous to increasing the household savings. Measures and tax incentives, which not only give more liquidity at the hands of the individuals, but also offer efficiencies on savings, will be a welcome step.
Also amongst the expectations, the key would always revolve around increasing the current exemptions limits on income tax.
People would expect the budget to increase the base exemption limit for taxable income from current Rs. 250,000 to Rs. 300,000.
Expectations would also be around increasing exemptions on payments covered under section 80C of the Indian Income Tax Act, 1961 from the current levels of Rs. 150,000 to Rs. 200,000, which covers almost all avenues of investments made.
Expectations also remain for overall increase in exemptions currently available on children education allowance from Rs. 100 per month for a maximum of 2 children to Rs. 200 per cent for a maximum of 2 children, and transport allowance from Rs. 1,600 per month to Rs. 2,000 per month.
Given the overall focus on health, exemptions limits with regard to health insurance premium and exemptions on expenses on health check-ups should also be increased.
Also there is no denying that real estate sector plays a key role in increasing the overall growth of an economy, and thereby increasing exemption limits on interest paid on home loans from Rs. 200,000 to Rs. 250,000 and principal payments can provide dual benefit, i.e. fillip to the real estate sector, and also benefits to the economy. In this regard, relaxation around 3-year completion period (for availing interest deduction of Rs. 200,000) should also be relaxed to 5 years, as given the nature of the projects now being developed, project completion generally takes longer.
Deduction under 80TTA, i.e, Interest on savings bank account, should be increased from Rs. 10,000 to Rs. 20,000.
The sentiments are high on the expectations, and that’s why, there are many more avenues which the finance minister can touch to bring benefits to individual taxpayers, which could include ease of lending rate for small entrepreneurs, and also for education etc. Measures around special provisions for women entrepreneurs will also be a welcome step. However, given the overall global economy scenario, and given the deficit situations, we need to see how the budget unfolds for the common man.