The Union Budget is due to be announced on July 05, 2019 by the Finance Minister Nirmala Sitharaman and taxpayers are already speculating on the various income tax benefits that may be introduced in the Budget. Though the Interim Budget introduced some reforms in the tax front earlier in February, expectations among the common men have been flying high.
Here are the income tax benefits that may be announced by the Finance Minister in the Modi Government’s first Budget post-re-election:
Increase in the tax benefit limit under Section 80C
As per Section 80C of the Income Tax Act, taxpayers, especially the salaried front, are eligible for tax benefits up to Rs.1.50 lakh from their gross income. Though the 80C limit has remained unaltered since the last Union Budget, taxpayers anticipate the limit to be increased up to Rs.2 lakh in the upcoming Budget. This will allow salaried individuals to direct a higher portion of their savings towards investments. An increase in the tax benefits limit will also allow home loan borrowers to claim higher tax deductions on interest payments under Section 80C.
Increase in tax exemption limit on interest on savings bank accounts and deposits
At present, the tax exemption limit on interest earned through savings bank accounts and deposits for senior citizens is set at Rs.50,000. However, the interest earnings not liable for taxation in case of others has been limited to Rs.10,000. Hence, an announcement regarding the same where the limit for other individuals has been increased could be expected.
Revision of the Income Tax Slab
The government had earlier introduced a full tax rebate to taxpayers with income up to Rs.5 lakh in the Interim Budget announced in February. This has led to the speculation that taxpayers from the other slabs will also be benefited with tax rebates by revising the tax implications on various income brackets.
Termination of Securities Transaction Tax (STT)
Investors have also been keeping their hopes high over speculations of the government’s decision to abolish the securities transaction tax (STT) on securities, mutual funds, and stocks ahead of the Union Budget announcement.
Taxpayers anxiously wait for the Union Budget announcement by Nirmala Sitharaman due on Friday. An improvement in income tax benefits could increase the quantum of disposable savings for taxpayers to eventually direct them to investments, eventually boosting the economic growth of the country.