InvestorQ : For salaried income tax payers, are there are any specific tax exemptions that we can expect from Nirmala Sitharaman’s Budget?
NISHA Nayak made post

For salaried income tax payers, are there are any specific tax exemptions that we can expect from Nirmala Sitharaman’s Budget?

Answer
user profile image
1 year ago


The interim budget presented in February has already given some tax exemptions to salaried tax payers in the form of rebate of Rs.12,500 up to income of Rs.5 lakhs. However, with a view to boost spending and consumption, the following tax benefits are likely to be given.

· The tax exemption limit could be effectively increased to Rs.5 lakh and the rebate could be done away with. It will have no effect on people earning up to Rs.5 lakh but will be fair to people with higher income. Also, the budget may say that only people earning more than Rs.5 lakh need to file returns. This will ease compliance burden.

· The Section 80C limit has been maintained at Rs.1.50 lakh for a long time. This could be enhanced to Rs.2.50 lakh to be more realistic.

· The budget may also look to withdraw the tax on LTCG on equities but STT is likely to remain. This should be positive.

· The home loan benefit is still restricted to Rs.2 lakh but that may not be realistic with current home prices. A level of Rs.3 lakhs is possible.

· The standard deduction may be increased to Rs.75,000 or the benefit of medical reimbursement may be brought back. LTC could also be made annual instead of bi-annual, which is quite confusing.

Of course, all these will depend on the government resources constraints.