Income tax exemption limit may be raised by ₹50,000 to ₹300,000 and section 80C exemption may also be raised to ₹200,000 in the forthcoming budget, according to PwC India partner Kuldip Kumar. The tax expert is also expecting that women tax payers may get higher exemption limit of upto ₹325,000.
Budget expectations from Kuldip Kumar, Partner and Leader Personal Tax, PwC India:
1) Basic exemption limit may be raised from Rs. 250,000 to Rs. 300,000 for individuals less than 60 years and from Rs. 300,000 to Rs. 350,000 for 60 years or more but less than 80 years.
2) Women tax payers may get higher basic exemption of Rs. 325,000 or even at par with senior citizens .
3) Considering the wider options of tax saving available, 80C deduction currently available upto Rs. 150,000 may be raised to Rs. 200,000 in order to encourage taxpayers to save more for their future and also save tax.
4) Considering delay in housing projects and also inching up of interest rates, interest on housing loan for a self occupied house property which is limited to Rs. 200,000 may be enhanced to Rs. 250,000 and the set off cap of adjusting loss from house property against other heads of income may also be accordingly raised from Rs. 200,000 to Rs. 250,000.
5) Government recently announced raising of the exemption of lump sum payment upon retirement from 40% to 60%. Government also announced that Government employee's contribution to Tier II account with a lock in period of 3 years, be eligible for deduction under section 80C. This may also get extended for private employees. Necessary changes may get introduced in the Budget to give effect to these announcements.