As Finance Minister Nirmala Sitharaman gets ready to announce her maiden budget on July 5, expectations among Indian citizens are already sky high. The middle-income group has demanded the government to either increase the overall tax exemption threshold or introduce tax breaks to reduce strain on their household expenses. Tax experts said that the government is likely to take certain steps to ease taxation and may introduce some sops to boost demand and speed up economic growth. Income tax changes expected in Modi 2.0 government’s first budget.
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.
Higher deduction to home loans: since the real estate sector has been affected negatively due to a demand slow down. The government could offer more tax benefits to buyers to incentive buying housing properties for boosting demand in the sector. People can claim a maximum deduction up to RS. 2 lakh under section 24 B of the income tax act.
More tax benefits towards health care: there are high chances that government will increase deduction under tax saving instruments available in health care .the limit could be increased from the current RS.25,000, applicable to people aged 60 years, under section 80 (d). The current limit of exemption for people aged above 60 years is RS. 50,000.
Tax-free bonds may witness a comeback: the government in the budget will be to boost infrastructure projects as it holds keys to boosting job growth and pushing up demand. Lack of jobs has begun to hurt India like never before.
India stock market with just three days go before finance minister to present her budget in parliament, the market has hopes from the union budget. Sensex and Nifty closed higher in trade today. We expect budget will be more or less in continuity with the interim budget and we do not participate in any major announcements.