The interim budget for the 2019-20 will be presented by the Union Finance Minister Piyush Goyal on Friday. As the Loksabha elections are scheduled in May, this will be the last Budget of the incumbent government.
Some of the expectations from the interim budget are the following;
For the salaried class, a relief in the form of hike in threshold limit to 3 Lakhs may be granted. However, the chances for change in tax slabs are lesser.
Deduction under Section 80C of the Income Tax Act was last increased in the year 2014 to Rs 1.5 lakh. This time, it is expected to increase the limit to Rs. 2.5 lakh to provide higher tax benefit to individual tax payers.
Also, deduction for home loans may also increased as the existing deduction of Rs 2 lakh is not sufficient to take care of the actual burden of EMIs paid on home loans in view of the rising home loan rates.
The government may consider increasing the eligible amount of deduction of interest (from income) on home loan from Rs 2 lakh to Rs 3 lakh to enable the taxpayer to claim full benefit of interest paid on home loans.
In the corporate sector, which is the heavily taxed sector, it is expected that the rate of tax may be reduced. The last budget slashed the corporate tax rate to 25% from 30%, where the industry is frequently demanding a further reduction of 5%. The government has taken several measures to curb the cost of healthcare and realize its vision of making healthcare accessible. However, measures like imposition of un-nuanced price control on a number of drugs and medical equipment like stents and knee implants have attempted to reduce cost without ensuring the industry viability. Further, higher tax exemptions for the middle class and for small businesses anticipated.
With regard to the Angel Tax, which created some confusions last year, it is expected that the Budget will bring more clarity on the same. Several startups have raised concerns over levying taxes on angel funds under Section 56 and 68 of the Income Tax Act, which provides for taxation of such money received by an entity.
In the customs side, it is expected that the duty on import of medical equipment may be reduced. Presently, India is one of the top countries imposing such a highest rate, i.e 8.25 per cent customs duty on orthopaedic appliances, artificial implants, and surgical instruments.