Given that the government's finances are in much better shape then they were ever before, here are a few announcements that could be a part of the Union Budget 2017-18.
Tax slabs likely to rise
The government in all probability could raise the tax slab, as nothing much had been done last year on this count. In fact, not much benefits were given to individual tax payers. This year the de-monetization impact may force the government to push tax slabs higher. While many individuals are expecting the tax slab to be raised to Rs 5 lakhs, that would be overly optimistic. At best one can expect the basic tax slab to rise to Rs 30,00,00. What this means is that individuals would at most save Rs 5,000 as tax. If it is raised further expect higher tax savings.
Tax benefits limit maybe raised
There is also a possibility that tax limits under Sec 80C could be raised. This is largely to channelize savings. Presently, investors investing up to Rs 1.5 lakh per year in instruments like PPF, insurance premium, school tuition fees, EPF, ULIPS, ELSS etc., qualify for a tax exemption. This limit could be raised to Rs 2 lakhs.
Interest on housing loans
Interest on housing loans presently allows you to claim interest deductions of up to Rs 2.5 lakhs. This could be increased giving a boost to the real estate sector in India, which has been suffering following de-monetization. Presently, one can also avail Sec 80C benefits for principal amount of housing loan paid upto Rs 1.5 lakhs.. Housing has been a priority of the government of India and it is likely that benefits this year could once again come in the form of housing loans.
