Individual taxpayers are expecting a change in tax slabs in budget 2020
The corporate tax rate- cut has triggered hopes ahead of the Union Budget 2020 due on February 1. From tax expert to taxpayers, everyone has got some expectations from the Finance Minister of India, Nirmala Sitharaman. In this article, we will look at the top five biggest budget expectations in 2020.
1. Relief to individual taxpayers
The current tax slab says that income from 2.5 lakhs to 5 lakhs is taxed at 5 per cent, nothing after considering rebate. People who earn between 5 lakhs to 10 lakhs in a year has to pay 20 per cent of their money as tax. It is expected that FM will carry out some rationalization in the Budget 2020 to moderate rate of tax. People are expecting that the Finance Minister may relax the personal income tax slab rates.
2. Higher deduction for housing loan
Experts believe that the government should promote the housing sector by giving a higher deduction for interest on housing loan and consider increasing the limit to Rs 2,50,000 for one self-occupied house property and Rs 3,00,000 for two self-occupied house properties.
3. Increase the limit of section 80C to boost investments
People are expecting that the government will increase the deduction under Section 80C to a minimum of Rs 2,00,000 as per section 80C that allows deduction not only in respect of investments but also expenses that we go through in our day-to-day lives such as housing loan principal repayment, tuition fees.
4. GST rate cuts
Since the implementation of GST, many reforms have been made in it. In the last two years, GST rate cuts have led to reduced revenue collections. The auto-sector is looking for a rate cut of about 10 per cent from 28 per cent to 18 per cent in automobiles. Also, the possibility of exemption from customs duty of 5 per cent for lithium-ion batteries is on the cards. The Healthcare segment also expects to have the health care services zero-rated product under GST.
5. Sector-specific incentives
Ministry of Finance has held meetings with representatives of various sectors and industrialists for the upcoming budget 2020. Sectors such as infrastructure, real estate, non-banking financial finances, and power discoms are suffering from finance shortage and demand. The government has outlined a plan for real estate and infrastructure but the mechanics are yet to be worked out. The government might aid the infrastructure plan through the issue of long term tax-deductible infrastructure bonds.
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