Expectations of taxpayers from Budget 2018

The Budget is just round the corner and tax experts hope that the Finance Minister will provide benefit to common men whose spending power just bore the brunt of GST and demonetization.

This budget is the last one for the government before the general elections in 2019. Hence, experts are of the opinion that a favorable revision in the income tax slab, a push in medical insurance for senior citizens and relaxation in Section 80C will offer income in hands of common men.

Section 80C

The government had revised the exemption limit under Section 80C from INR 1 lakh to INR 1.5 lakh. The section is currently crowded with a number of investment avenues which are available under it. Taxpayers expect this limit to be increased to INR 2 lakh to provide thrust to savings on account of inflation. This could bring some relief to lower income groups and encourage investment into different sectors.

Tax slabs

The tax slabs remained unchanged in 2017 but there was a marginal relief to small tax payers by reducing the rate of tax. The taxpayers hope that the tax slab will be increased from INR 2.5 lakh to INR 3 lakh. Further, the limit of INR 5 lakh is expected to increase to INR 6 lakh and INR 10 lakh to INR 12 lakh.

Medical Insurance

The Government introduced a deduction of INR 15,000 towards medical expenses. However, there has been a huge increase in the cost of medical treatment and it is expected that the limit under this section will be raised from the existing limit of INR 25,000.

Market linked savings limit

The Government may look at extending the limit for tax saving schemes like ELSS. An additional limit in the schemes could mean an additional flow of money into the market.