Union Budget 2015 will be announced on 28 February 2015. Here is what one may get from the upcoming budget.
Student – Government may allocate more funds for spending in the education space. This has been the trend over last few years but the amounts were not substantial. Students may expect to get education loan more easily at lower rates. Rebate could come for schools in the rural areas.
Homemaker – Homemakers can expect some increase in their monthly savings. The government is serious about controlling inflation and may seriously look at the agriculture sector. Gold could be available at cheaper price due to cut in duties.
Businessman – Can get relief from MAT (Minimum Alternative Tax) if not for all, some sectors may see a roll back. Incentives for revival in capital expenditure cycle and a crystal-clear, time-bound road-map for GST will be a big booster for the organized manufacturing and trading community.
Salaried – may see the increase in minimum tax slab, leaving more in the individual’s hand. RGESS scheme may be made more investor friendly along with the increase the limit for 80C investments. Adding some more instruments for investments that are eligible for deductions like Infra bonds were introduced 3 years ago.
Senior citizen – May also see increase in the limits for the tax saving instruments. Some concession on the health care for senior citizen can be expected.
Investors – Not much on the disinvestment front has happened this year, this budget may give some clear road map on the same for retail investor. It is a possibility that the tenure for short term in equity be increased from 1 year to 2 or 3 years (similar to debt mutual funds in 2014)
Professional – We could look at an increase in service tax rates, which might be a negative.
Aam Admi Budget
Expectations from Union Budget 2015 – 16
1. Increase in limit u/s 80 C
In the previous budget government had enhanced the exemption limit u/s 80 to Rs. 1.5 Lacs from earlier Rs. 1 Lac. However in order to further boost the consumption and investment driven growth we expect that it would be beneficial for both the tax payer as well as the government to enhance the limit to Rs. 3 lacs from current Rs. 1.5 Lacs
2. Increase in income slabs
In the previous budget the income slabs had been increased from 2 Lacs to 2.5 Lacs i.e. no tax applicable on income upto Rs. 2.5 Lacs. We expect that even this budget would be positive for tax payers as the country has posted good numbers in terms of rise in GDP and fall in inflation rate. Thus we may see a further increase upto Rs. 3 Lacs for the exempt income i.e. for income upto Rs. 3 Lacs no tax will be applicable
3. Enhance interest deduction limit for housing loan
In order to boost infrastructure growth in the economy, the previous budget had increased the limit for the interest which can be claimed as a part of EMI paid on the housing loan. Earlier the limit was Rs. 1.5 lacs which was enhanced to Rs. 2 Lacs. Considering the focus of present government on infrastructure boost we expect that the limit on the same to be enhanced to Rs. 3 Lacs
4. Increasing limit us/ 80 D
Considering the rising cost of medical treatment, surgical costs etc. it is expected that the limit u/s 80 D for medical premium can be enhanced. It is expected that the limit u/s 80 D will be doubled.
5. New Pension Plans
We may see new provision for pension plans in the current budget. Creating a corpus which shall provide income post retirement is a major concern of each and every earning individual. We expect that the government will initiate new pension funds upto Rs. 50 K.
6. Switch to Direct Tax Code Regime (DTC)
Since long implementation of DTC has been awaited. However it is expected that the current government would take a keen approach in implementing the Direct Tax Code.