PM Modi's gift..No income tax till Rs 9.2 lakh! 10 things for middle class in budget
New Delhi: The Indian middle class has been anxiously waiting for today’s budget. It has a lot of expectations from the budget. PM Narendra Modi will make sure that Finance Minister Arun Jaitley does not disappoint the salaried class and the youth.
Here are 10 things to look forward to
1. Increase in Income Tax limit
At present, income above Rs 2.5 lakh is taxed, this may be increased to Rs 3 lakh.
2. Change in tax slabs
At present, 10 per cent tax is levied on annual income of Rs 2.5 lakh to Rs 5 lakh, 20 per cent on Rs 5 lakh to Rs 10 lakh and 30 per cent on income above Rs 10 lakh. The first two slabs can be widened or tax rate may be lowered.
3. Exemption limit on allowances may be increased
Salaried employees get tax exemption on many allowances/benefits like children's education, conveyance, medical reimbursement, house rent and leave travel. There has been hardly any change in these limits for a long period. Expect a raise in these limits.
4. 80 C deduction limit may be raised
Deduction under 80C may be raised from Rs 1.5 lakh to Rs 2 lakh.
5. Exemption limit for senior citizens may be raised
The present exemption limit of Rs 3 lakh for senior citizens (60 years to less than 80 years) and Rs 5 lakh super senior citizens (80 years and above) could be increased to Rs 4 lakh and Rs 6.5 lakh respectively.
6. Reintroduction of deduction on infrastructure bonds
FM may reintroduce deduction of Rs 20,000 or actual amount invested, whichever is lower, for investments made in infrastructure bonds.
7. More deduction for NPS investment
For National Pension System (NPS), the deduction under Section 80CCD (1B) may be increased to Rs 1 lakh from Rs 50,000 at present. NPS withdrawals on maturity may be made tax free.
8. Interest subsidy on home loans
Interest subsidy of 3% and 4% subsidy, announced by Prime Minister Narendra Modi, is being given for loans of up to Rs 12 lakh and Rs 9 lakh, respectively under the Pradhan Mantri Awas Yojana. This can be extended to bigger loan amounts to help home buyers in bigger cities.
9. Higher deduction on home loan EMIs
Currently, the deduction available on home loan is up to Rs 2,00,000. This may be increased to Rs 3 lakh.
10. Early deduction on home loan EMIs
One can avail deduction for interest on home loan only after getting possession of the property. This means the benefit begins several years after the buyer gets the home loan and begins paying the EMIs. This deduction can be given right from the payment of the first EMI.
If the above steps are taken then one will not have to pay income tax for an annual income Rs 3 lakh (basic exemption limit)+ Rs 2 lakh ( 80C)+ Rs 3 lakh (home loan)+ Rs 1 lakh (NPS) + Rs 20,000 (Infra bond)= Rs 9.2 lakh