Budget 2019: Five Income tax benefits that Modi 2.0 Government may announce on July 5

Budget 2019 is just two days away and expectations of the common public, especially the salaried class are quite high. In line with the interim budget, they are expecting some relief in income tax limit, hike in the standard deduction under the section 80(C), tax exemption on housing loan interest rate, etc. in the Union Budget 2019 falling on July 5th. So, let's see if their demands are met in this budget or whether Finance Minister Nirmala Sitharaman ignores it.

Commenting on the income tax related expectations Vivek Jalan, Co-Founder, Tax Connect Advisory Services said, "Consumer demand has shown signs of being slugging over the past year impacting the growth of the manufacturing sector. The Budget needs to find ways to put more money into the hands of people with an objective of boosting consumer spending as well as savings. In the interim budget earlier this year, the government had announced a tax rebate up to Rs 5 lakh. However, the fact that the existing tax slabs were left unchanged meant that people with a taxable income  of more than 5 lakh received no benefit of this exemption."

See Zee Business video below:

#BudgetWithZee | बजट में क्या होंगे बड़े ऐलान, क्या टैक्स में राहत से खुश होंगे किसान, किचन से कारोबार तक क्या मिलेगी सौगात? देखिए #BudgetKiBaat रोज रात 8:56 PM पर सिर्फ ज़ी बिज़नेस पर।#Budget2019 #UnionBudget pic.twitter.com/5xxldzPmXj

— Zee Business (@ZeeBusiness) July 1, 2019

Speaking on the top 5 steps that Modi 2.0 government may announce in regard to the Income Tax and other direct tax related expectations in the budget 2019 Vivek Jalan pointed out the following 5 steps that Nirmala Sitharaman may announce on July 5:

1] Change in tax slabs so that Income Tax interest rate should be slashed from the current 20 per cent to 10 per cent for the salaried class earning up to Rs 10 lakh.  This will boost savings and expenditure and the move would leave more disposal of personal income in the hands of the middle class. 

2] Existing standard deduction limit is Rs 1.5 lakh under section 80C for certain investments/payment, which hasn't been changed in the last 5 years. In this period, there has been a considerable increase in the cost of living and the need to boost savings. Taking a cue from this development Nirmala Sitharaman may consider increasing the standard deduction limit to at least Rs 2.5 lakh per annum.

3]  The Modi 2.0 Government is working to provide 'Housing for all' by 2022. To achieve this objective, the FM may increase the limit of deduction for payment of interest on housing loans from Rs 2 lakh to Rs 3 lakh.

4] Currently, the deduction for interest earned on savings bank deposits is allowed as a deduction only up to Rs 10,000. Last year, this limit was enhanced to Rs 50,000 for senior citizens. Given the increase in the cost of living, the government should consider enhancing this limit to Rs 50,000 for all individuals. 

5] To boost more investments, STT (Securities Transaction Tax) on purchase/ sale of stocks, mutual funds and other securities may get scrapped on July 5th.