GSRA | BUDGET EXPECTATIONS

GSRA | BUDGET EXPECTATIONS

TAX RATES :

Keeping in view the rising cost of living standard and inflation in the economy, the government could consider:

  • To increase the minimum slab limit for the amount not chargeable to tax. (The limit was last raised in the Budget of 2014).
  • To Increase the amount of slab limit for levy of the highest tax rate.
  • To bring down the tax rate by 5 per cent making the maximum slab rate at 25 percent.

HOUSE PROPERTY:
Currently, the deduction of housing loan interest for a self-occupied property is up to INR 2 lakh.

Further, section 80EEA provides additional deduction of INR 1.5 lakh for interest payment on purchasing a house with the stamp duty value not exceeding INR 45 lakh. Considering the real estate price in metro cities, the restriction on the value of the house is expected to be removed and higher deduction to be extended to all taxpayers for their first house purchases irrespective of the cost and size of the house.

DIVIDEND DISTRIBUTION TAX (DDT) :

It is expected that DDT may be abolished to do away with multiplicity of taxes for companies. However, dividend income would be taxable in the hands of the receiver at the existing slabs for the concerned individuals.

INCREASING LIMITS FOR DEDUCTIONS :

  • Deduction U/s 80C: Expected that the current deduction limit of INR 1.5 lakh available to individuals for certain investments/ payment be enhanced to at least INR 2.5 Lakh.
  • The government could consider introducing the deduction for investment in infrastructure bonds to encourage investment in these instruments and aid government to meet the development needs of the country.
  • Deduction U/s 80TTA: Deduction for interest earned on bank deposits in savings account is expected to be enhanced from INR 10,000 to INR 50,000 to encourage savings by the middle class in banks.

WITHDRAW TAX ON LONG-TERM CAPITAL GAIN (LTCG) :

Currently, Gains arising from the transfer of listed equity shares exceeding INR 1 lakh are taxed at 10%, without any indexation benefit. It is expected that government may roll back the tax levied on LTCG on sale of securities on which STT is paid.

INTRODUCTION OF INCENTIVES :

To increase the significance of certificate of appreciation issued to honest taxpayers, it is expected that the government may introduce some certificate linked incentives/ deduction/ benefits in tax/public amenities.

TAX DISPUTE SETTLEMENT SCHEME :

To bridge the fiscal deficit gap and monetise the amount stuck in tax litigations, it is expected that the government may introduce a litigation settlement scheme that will allow companies to put an end to legacy tax disputes by paying a portion of the money demanded by the revenue department.

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