Five direct tax benefits that Modi 2.0 Government may announce in Budget 2019

Budget 2019 is fast approaching and so does the expectations of the public in general. Their main demand is related to the direct taxes being levied on the salaried and common public. This particular section of the society wants more announcements in regard to the Income Tax limit, standard deduction under section 80(C), an exemption in housing loan interest rate etc. Since these demands have been already addressed in the interim budget 2019, direct tax experts are expecting some bold announcements in this regard in upcoming budget 2019.

Speaking on the matter 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."

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Aske about the five major steps that Finance Minister Nirmala Sitharaman may take in regard to the Income Tax and other direct tax related matters Vivek Jalan of Tax Connect Advisory Services listed the following five measures that the Modi 2.0 government may announce in budget 2019 on July 5:

1] The government may consider changing the tax slabs so that Tax rate should be slashed from the current 20 per cent to 10 per cent to those earning up to Rs 10 lakh.  This will leave more disposal of personal income in the hands of the middle class and give a boost to savings and expenditure in the economy. 

2] The current deduction limit of Rs 1.5 lakh under section 80C for certain investments/payment has not changed in the last 5 years. With the increase in the cost of living and the need to boost savings, the government should consider increasing this limit to at least Rs 2.5 lakh.

3]  The government is working to provide 'Housing for all' by 2022. To achieve this objective, the government should consider increasing 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, Securities Transaction Tax on purchase/ sale of stocks, mutual funds and other securities should be scrapped. 

So, let's hope for the best when the Finance Minister Nirmala Sitharaman stands in the parliament to present the budget 2019 on July 5th.