Expectations are increasing among all sections of people as Finance Minister Arun Jaitley is all set to present his third budget today in the aftermath of PM Modi's demonetisation decision. Experts have spoken about what the budget 2017-2018 could look like and what one can expect from the budget.
Every year ahead on the eve of budget presentation expectations increase but only few are met. Speculation are on what all expectations Finance Minister will meet in this budget.
Many experts rated 2016 budget as a populist,conservative and designed to appease the masses. Here is what one can expect from the budget 2017.
Income Tax slabs and rates modification
All people expect income tax rates to be reduced. Govt is expected to increase the tax exemption slab from Rs 2.5 lakhs to Rs 3 lakhs. There may also be a reduction in the tax rates.
Currently following are the tax slabs
10 % for incomes above Rs. 2.5 lakhs
20 % for incomes above Rs 5 lakh
30 % for incomes above Rs 10 lakh
Slab rate expectations
Taxable Income Tax Rate
Less than Rs. 4 lakhs Nil
Rs. 4 lakhs to less than Rs. 8 lakhs 10% on taxable income exceeding Rs. 4 lakhs (Max. Rs. 40,000)
Rs. 8 lakhs to less than Rs. 12 lakhs Rs. 40,000 + 20 % on taxable income over Rs. 8 lakhs (Max. Rs. 1.2 lakhs)
Rs. 12 lakhs and above Rs. 1.2 lakhs + 25% on taxable income over Rs. 12 lakhs
Lower Tax Rates
Current direct tax norms could be changed going by the argument that lower tax rates such as those prevalent in many economies actually have the potential to bring in greater revenues as they have a much broader tax base.
Incentives on Digital Payments
Government is expected to announce more incentives. Already service tax on payments for transactions upto Rs. 2000through debit/credit cards have been removed, 0.75% discount has been announced for digital payments at petrol stations.
Taxes on Capital gains to be increased
Speculation is on that new rule may be introduced for taxing capital gains from stock investments. At present there is no tax implication for gains made from stocks that have been held for a year. This minimum holding period, according to reports, may be raised to 2 or 3 years. There is also no limit on the tax-free gains, which might be capped at a high amount. Currently, there is a 15% tax on stocks sold within a year; this may be increased to 20%.
Existing Tax Saving Vehicles to be streamlined
Fixed deposits, pension plans, insurance policies, etc which are not streamlined to be streamlined and , bank fixed deposits can provide returns of 7.5-8% to people over 65 years of age.
Pension Income may not be taxed
Government may finally heed in to the popular demand to make penion income completely tax free. This will not only help the elderly but will also reduce operational work for income tax authorities.
Budget 2017 expectations, updates
- Defense Sector To witness Increased Investment
-New safety Cess might increase the Railway fares
-Government still undecided on BCTT
-Sugar subsidy might be discontinued from next Fiscal
- Why 2017 Budget is fraught with uncertainty
-Corporate Income Tax and MAT Reduction on the Cards in Budget 2017
-Start-ups hope for tax breaks and more FDI
-Expectations for the IT Industry
Reduced rates of personal and corporate taxes to improve coverage and compliance.
Complete abolition of current TDS mechanism to help boost growth through faster refunds.
Further government investment in cyber security to increase safety of government-citizen transactions.
Further infrastructure investment to help develop internet services and telecommunications.
-Budget 2017 May Introduce New Capital Gains Taxation Rules
-Automobile Sector eyes 200% weighted deduction
-Union Budget 2017 to feature higher infrastructure investment
-Budget 2017 to introduce GAAR
-Government to add a new “Fat tax” on junk foods
