5 Predictions for Budget 2017-18

1. 5 Predictions for Budget 2017-18

2. Raising tax benefit • A maximum of Rs 1.5 lakh can be claimed under section 80C and this limit has not changed since financial year 2014-15. As savings accounts are flush government can use savings accounts funds. It can be done by enhancing investment limit of PPF to Rs 2 lakh and bring 80C limit to Rs 2 lakh.

3. Raising minimum exempt income • The minimum exemption limit has been Rs 2.5 lakh since FY 2014-15 is still the same. • Under section 87A, those with income up to Rs 3 lakh, do not have to pay any tax, but with the rising cost of living this limit should be raised till 4lakhs, so people don’t have to bear the burden of tax.

4. Removing time limit • Tax laws allow deduction on interest on home loan of Rs 2 lakh per financial year, if construction of property is completed within 5 years, which is still not enough. • So the tax department must consider doing away with any time limit, at least for first time buyers.

5. Raising the medical reimbursements limit • At Rs 15,000 annual reimbursement limit is too less to take care of a family’s routine medical expenses. • With rising air pollution and associated ailments, the government must consider either increasing this limit or adding another reimbursement for benefits of people.

6. Clarity on NPS tier II • Tier II account is a voluntary investment account. While there are tax benefits and withdrawal restrictions on Tier I, there are no such restrictions on investments made in Tier II accounts. • The government must clarify how withdrawals from Tier II account should be taxed.

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