With the union budget just days away, the question everyone is asking is: how will budget 2009 allow my money to earn more through investments and tax sops? CNBC-TV18’s Neha Bothra gets you the details.

It is an event that will decide how over 1 billion savers will invest their money. The personal finance industry hopes Budget 2009 will focus more on long-term policies. In effect, they want the investment exemption limit under section 80-C of the IT Act to be split, making long-term investments more attractive.

Sam Ghosh, CEO, Reliance Capital, “On the life insurance side, long-term policies should be focused upon, this brings in pension also. PFRDA will look into that to see it grows too.”

Says Pankaj Razdan, CEO, Birla Sun Life Financial Services, “We have to encourage people to come back into long-term saving and infrastructure investment and give differential treatment. They cannot treat three year and ten year tenure similarly. With the tenure and quantum give them a difference in terms of tax. So give tax benefit and ensure structurally these things are being addressed.”

Speaking of Section 80C, the industry also feels that clubbing exemptions for education, housing loans with that for other investments dilutes the focus. It wants housing loans to enjoy a higher tax incentive.

Subhash Lakhotia, Tax Consultant, said, “Government should divide the window in two brackets––the minimum amount and the total deductible amount should be fixed as a percentage of the gross income. The housing sector limit of Rs 150,000 should be Rs 300,000. It is indirectly solving problem of government."

Experts also feel the government should look to make equity mutual funds more attractive by increasing tax benefits on such products––a move that should move people from investing solely in small savings schemes. There is also a strong voice urging the government to restore standard tax deductions for salaried employees.