New Delhi: With the Union Budget for 2016-17 scheduled to be presented by Finance Minister Arun Jaitley on February 29th, the aam aadmi has a lot of expectations from him.
Increase in the income tax exemption limit and higher deduction limit on home loan interest are among the common ones the salaried group is expecting.
Besides, the reintroduction of infrastructure bonds to provide an extra deduction to the salaried group is also on the card.
Here are 10 major expectations that aam aadmi is expecting from the Budget 2016-17:
1. The income tax limit is expected to be increased from the prevailing Rs 2,50,000 to 3,00,000.
2. The government may increase home loan principal repayment exemption limit from Rs 1.5 lakh to at least Rs 2 lakh and increase deduction limits on home loan interest from Rs 2 lakh to Rs 3 lakh for self-occupied property.
3. House Rent Allowance (HRA) is a key component of the salary and can therefore be claimed for deduction. Salaried persons who get a lump sum amount without an HRA component can claim a maximum (additional) deduction of Rs 2,000 per month under Section 80 GG, which is expected to be increased by the government.
4. In the previous budget, the service tax was increased from 12.5 percent to 14 percent. This seems to be a major concern regarding the common man. It is expected that if the service tax cannot be reduced, it should not be increased either.
5. The government is likely to come up with some major steps on hiking health insurance premium and payment made on account of preventive check-up limit in Section 80D. New insurance policy of Rs 1,00,000 is likely to be introduced whose premium will range from 500 to 1000.
6. There is another provision of presenting a cashless health insurance scheme for senior citizens.
7. At present, children's education allowance of Rs 100 (per month) and hostel allowance of Rs 300 (per month) are exempt from taxes. These limitshave been unchanged for a long time. People are now expecting these limits to be increased to at least Rs 1,000 and Rs 3,500 per month.
8. The salaried group also expects hike in transport allowance from present limit of Rs 1,600 per month to at least Rs 3,000 per month.
9. There is a major chance of reduction in the stamp duty and registration costs to aid the common man in affordable housing.
10. More tax-friendly pension schemes like EPF and PPF are expected to be introduced that will allow tax-free withdrawals.