Budget 2019-20 India Income Tax Slab Expectations: With days to go before the interim budget for 2019 is tabled, individual taxpayers are expecting the government to provide some tax reforms which will boost their purchasing power and stress less about the taxes. The last Budget of the present NDA government is likely to be presented by interim Finance Minister Piyush Goyal in the Lok Sabha on February 1.
Key expectations from Union Budget 2019:
In order to make the Budget popular, it is possible that the government may continue with the rebates introduced last year such as standard deduction of Rs 40,000, rebates on medical expenditure, and interest earned on savings income, said Poorva Prakash, Senior Director, Deloitte India.
The government, according to her, could look at areas like National Pension System (NPS) as well as provide relief to senior citizens. Another area the government could focus on is providing incentives for digital payments which would encourage electronic payment as well as reduce the cash settlements, she said.
Populist budgets could be more about introducing tax sops like increasing the investment limit, increasing the basic threshold limit, and increasing slab rates, she said, adding that the government could look at changing tax rebates and incentives.
“We did see last year the government has introduced several rebates and incentives so it is possible they could go by this trend. If they do so, one area they could look at is NPS. Recently, the government has introduced several beneficial schemes under NPS rules, which will become effective once the Finance Bill is passed. They intend to increase the contribution by 10 percent to 40 percent for central govt employees. They are also providing tax rebates on withdrawals made up to 60 percent. However, to make this scheme attractive they could enhance the deduction limit which is currently at Rs 50,000. They could increase to 1 lakh which would encourage the investment in NPS,” Prakash said.
Stressing that providing housing to all has been the key agenda of the present dispensation, Prakash said the government could consider increasing the eligible amount of deduction of interest (from income) on home loan from Rs 2 lakh to Rs 3 lakh.
“Currently, the housing cost is very high and interest on housing loans are very high as well especially in urban areas. Therefore, the govt could revisit the current deduction which is restricted to 2 lakhs for individuals. They could look at enhancing the limit from Rs 2 lakh to Rs 3 lakh. The other area they could look at is increasing the standard deduction from 30 percent to 40 percent on rented properties. This would mean encouraging housing rentals as well as it would cover the maintenance cost of individuals,” she said.