Income tax changes expected from Nirmala Sitharaman's maiden budget
New Delhi, July 04: As Finance Minister Nirmala Sitharaman is all set to present her maiden Union Budget for financial year 2019-2020 on July 5, expectations are high among the common man.
While it is the middle-income group with high expectations from Modi government 2.0 to lower the tax slabs, tax experts want the Finance Ministry to increase the overall tax exemption threshold or come up with some tax breakup slabs to reduce the strain on their household expenditure.
While the Interim Budget presented by the then FM Piyush Goyal in February announced big income tax relief for the common man, the middle-class is looking at FM Nirmala Sitharaman to take this a step further.
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Here are some income tax changes to expect in the upcoming Budget 2019-20 by Modi 2.0 government.
1.
Higher
tax
exemption
limit
Since
a
full
tax
rebate
up
to
Rs
5
lakh
was
introduced
under
Section
87A
in
the
interim
budget,
it
is
unlikely
that
there
will
any
further
alteration.
But
citizens
want
the
government
to
increase
the
tax
exemption
threshold
from
the
existing
Rs
2.5
lakh
to
at
least
Rs
3
lakh.
2.
Higher
income
tax
deduction
The
income
tax
deduction
allowed
under
Section
80(C),
currently
at
Rs
1.5
lakh,
could
be
raised
to
Rs
2
lakh
or
above.
This
will
allow
people
to
save
more
tax
on
investments
made
under
Section
80(C)
of
the
Income
Tax
Act.
Investments
towards
PPF,
EPF,
NSC,
fixed
deposits
and
NPS
qualify
for
deduction
under
Section
80(C).
3.
High
Deduction
of
interest
on
home
loans:
As
the
real-estate
sector
has
been
affected
negatively
because
of
a
demand
slowdown,
the
Centre
might
consider
increasing
the
limit
of
deduction
for
payment
of
interest
on
housing
loans
from
Rs
2
lakh
to
Rs
3
lakh.
At
present,
people
can
claim
a
maximum
deduction
up
to
Rs
2
lakh
under
Section
24B
of
the
Income
Tax
Act.
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4.
Reintroduction
of
investment
in
Tax
Saving
Infrastructure
Bonds:
The
government
might
consider
re-introduction
of
the
deduction
for
investment
in
infrastructure
bonds
up
to
Rs
50,000.
The
deduction
for
investment
on
such
bonds
was
given
to
the
extent
of
Rs
20,000
in
FY
2010-11
and
FY
2011-12.
5.
Tax
benefits
towards
healthcare
There
are
high
probabilities
that
the
government
will
increase
deduction
under
tax
saving
instruments
available
in
healthcare.
The
cap
could
be
increased
from
the
present
Rs
25,000,
applicable
to
individuals
aged
below
60
years,
under
Section
80(D).
The
concession
can
also
be
increased
under
Section
80(D)
for
people
more
than
60
years
of
age.