Expectations from interim budget 2019
The finance minister Mr. Arun Jetly made it clear in his speech a few days ago that budget will be driven and base by economic issues which need quick resolution and the process may “go beyond” a vote on account.
An indication that the government will use it as a crowd-pleaser before the all-important Lok-Sabha elections which are to be held in April-May 2019.
There are only 7-8 days left for Mr. Jetly’s speech, here are some key economic changes that the government is likely to announce:
Income tax exemption threshold limit to be doubled.
The government is expected to double income tax exemption threshold from Rs 2.5 lakh to Rs 5 lakh. This is probably one of the biggest expectation from this year’s interim budget.
Finance minister is also expected to reinstate tax-free status for medical expenses and travel allowances in a bid to offer better tax reliefs to people.
While taxpayers have gradually increased in the country after the implementation of stricter laws, a large share of the population still does not pay income tax.
It could have drastic measures on the government’s tax collection and can derail economic prosperity if such proposed move is operated in a good manner.
A decision may also be taken to lower the highest personal income tax rate from existing 30% to 25%.
Rate of corporate tax shall be reduced, benefits shall be given to pensioners.
Increased deduction limit under IT Act:
Since the government is reportedly planning to increase the income tax exemption limit, it could also raise the limit of income tax deduction under various sections of the act.
Industry bodies have already demanded an increase in deduction limit under Section 80-C from Rs 1,50,000 to Rs 2,50,000.
If the government announces such a deduction limit, it will be beneficial for millions of people in the country. Citizens will be able to increase the amount of refund they can claim.
Benefits to women’s:
The salary received by women employee during maternity leave shall be made tax free by the government up to 6 months.
The benefits shall be given u/s 10 of The Income Tax Act.
Focus On Farmers:
Many budget analysts have already declared the interim budget as a farmer-oriented budget. Not just a loan waiver, the government is expected to announce a direct transfer benefit scheme for farmers.
An announcement is also likely on quick loans at lower interest rates for farmers.
As stated in PTI report, the government is expected to increase agricultural credit flow by 10 per cent or one lakh crore, taking the total credit target to Rs 12 lakh crore. Such a move would allow the government to spend more on farmers.
The government is also expected to announce monetary benefits and concessions for small and marginal farmers.
Focus on healthcare:
Healthcare is another area where major announcements are expected. While last year’s focus was on Medicare, this year the government may offer increased tax exemptions towards healthcare and preventive checkups under Section 80D of the Income Tax Act.
Considering the government’s focus on introducing new healthcare projects for the poor, it would not be surprising if the government increases tax benefit on healthcare.