Reportedly the middle class tax payers may have a lot to cheer about in the Budget proposals to be presented by Finance Minister Nirmala Sitharaman on Friday. Furthermore sources said that the Budget 2019-20 will take the sops announced in the Interim Budget further by raising the basic tax exemption limit for an individual income tax payee to Rs 3 lakh from Rs 2.50 lakh at present to cover for the inflationary impact over the years.
Meanwhile in the Interim Budget, the government had proposed a rebate on all payable taxes if an individual's taxable income is up to Rs 5 lakh per annum, but it kept the basic exemption levels unchanged. Further the Budget will also reward the middle-class by increasing the ability to buy their dream home. Hence in this regard, the tax deduction limit on interest on home loans may be increased to Rs 2.5 lakh a year from the present Rs 2 lakh limit. But this enhanced benefit will come with withdrawal of deduction for interest on second house that was allowed earlier.
Moreover Government finance that is contained by lower growth in tax collections is expected to be augmented in a big way through disinvestment and higher dividend receipts from the RBI. Apparently the 5G auctions and sale of non-core assets of PSUs may fill the coffers to the extent that deficit may be prevented from going completely out of hand.
