New Delhi, Jul 3: People are expecting more tax reforms and tax breaks in the July 5 Union Budget 2019 despite the fact that the Narendra Modi government has already given income tax sops in the Interim Budget and may not announce any further concessions which are being eagerly looked forward to by the middle class.
Economists said currently, the income of minors included in the hands of parents is exempt to the extent of Rs 1,500 only for each minor. The average expenditure to meet cost of a minor's education, health or living expenses which has gone up considerably in recent years, limit of Rs 1,500 fixed is woefully inadequate.
They said new Finance Minister Nirmala Sitharaman at least should raise this limit to Rs 5,000 for each minor child.
The Union Budget is to be presented in the Lok Sabha on July 5 by Union Finance Minister Nirmala Sitharaman. This would be Ms Sitharaman's maiden budget as her predecessor Mr Arun Jaitley opted out of Union Cabinet in the second term of the Modi government owing to his health condition.
People expressed hope that this time the government may notify the complete tax exemption to the 60 per cent of the National Pension System (NPS) corpus that an investor can withdraw on maturity.
When the investor retires, he or she has to use 40 per cent of the corpus to purchase annuity and can withdraw the remaining 60 per cent of the corpus.
Of that 60 per cent corpus, 40 per cent of the amount is tax free and the remaining 20 per cent is taxable.
If the government, the economists said, notifies the changes, withdrawal stage would be tax free and more relaxable for aged persons.
According to the economists, the government should raise the bar of tax exemption threshold for individuals to Rs 3 lakh from existing Rs 2.5 lakh, which in turn can at least give Rs 2,500 more in the purse of aam aadmi.
Earlier, former Union Minister Arun Jaitley in the 2014 Union Budget increased the income tax threshold limit to Rs 2.5 lakh from Rs 2 lakh.
The economists said to give some sops to the people, the government may raise the scale of exemption limit on savings and investment such as PPF, EPF, NSC, fixed deposits and NPS under Section 80C of the Income Tax law.
Ms Sithraman can raise it to Rs 2 lakh from the current Rs 1.5 lakh, they added.
Making people healthy and strong is one of the agendas of the Narendra Modi government. For the purpose, they have initiated the Ayushman Bharat though steep medical expenses are the major concern of the NDA.
For the purpose, the limit can be increased to Rs 35,000 from Rs 25,000 under Section 80 (D) of the Income Tax for the people under the age of 60 years. The threshold can also be increased for persons above the age of 60 years. (UNI)