Major Tax Changes that are expected to be announced in Budget 2017

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Budget 2017 will be announced on Feb 1st and expectations are soaring high that Arun Jaitley the finance Minister of India may announce Income tax to spur consumption in the economy which has been hit by Demonetisation.

Let’s see what all changes are expected:

  • Economists say the income tax exemption limit for persons below 60 could be hiked from the Rs. 2.5 lakh currently. But estimation may vary as some economists say that limit could be raised to Rs 30 lakh. EY survey, on the other hand, says that the government should double the basic exemption limit to Rs 5 lakh per year.
  • SBI told in the report, if the exemption limit soars to 3 lakh, 10 percent rate would be applicable for income between Rs 3-5 lakh, while the rest remains the same.
  • Last Year Mr Jaitley allowed an additional deduction of Rs 50000 under Section 80CCD (1) for Investment in National Pension Scheme. This year this deduction is expected to increase by Rs 50,000 to Rs. 2.5 lakh.
  • SBI expects the government to increase the exemption limit of interest payments under housing loan to Rs. 2.5 lakhs for existing home loan buyers also from the current level of Rs. 2 lakhs.
  • A major hike is expected in the service tax which is currently 15% to align with the goods and service tax (GST) regime.

Also Read: GST Rates Decided: Rate Ranges from 5 to 28%

  • Tax Savings Infrastructure bonds are expected to make a comeback.
  • SBI said in a Report, to incentivise savings, the government should raise the exemption limit on tax deducted at source or TDS on interest on bank fixed deposits to Rs. 20,000 from the present limit of Rs. 10,000.
  • Digital Payments could be incentivised this year, to promote Digital India.

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