As the budget process was on, the expectation started building up on correcting the slabs, but FM did not match up the expectations of Aam Admi
As the budget process was on, the expectation started building up on (a) correcting the slabs – which means the slabs will be redistributed in a fashion that threshold limit increases and also the slab rate changes so as to push the higher rate post Rs:750,000/ to 20% (instead of 500,000) (b) increasing the limit of 80C and other deductions encouraging people to save as well to provide tax exemption (c) taxing super rich - a new concept been floating all across the place.
The above expectation was more keeping in mind that it will be a populist budget as election is round the corner.
The budget is far from the expectation of aam admi, to certain extent FM has clarified in his speech about base erosion in case the threshold limit is increased. The credit of Rs: 2000/- for the income upto Rs: 500,000/- no doubt will give some relief but clearly the impact is not very significant.
The other important area where people were expecting the increase of the limit of Rs:100,000/- for 80C -, which was fixed a decade ago. Though FM stressed upon infrastructure bond but again the limit and tax saving would have been the key driver for meeting the objective. Further, the expectation was to increase the deduction under 80D, though it has been done but only for limited purpose. This was a really a setback on the expectation.
Yes, the only point that was considered of levying surcharge over taxable income of Rs: 1crore ( who is considered to be super rich) is as per the expectation. The definition should not only be linked with income but also to be linked with the assets to increase the tax base.
Overall it does not seem to be a populist budget as thought so.
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