Modi's Budget may not have any major exemptions for salaried class.With the Narendra Modi government set to present its maiden Union Budget on July 10, expectations among the public is running high. There is a lot of hope that Finance Minister Arun Jaitley will bring in bold changes in the tax exemption limit which will come as a huge relief far the salaried class.But sources have told CNN-IBN there is unlikely to be any significant exemptions for the salaried class in the Budget. Sources say the government's hands are tied due to lack of fiscal space.While hiking exemption limit from the present Rs 2 lakh per year to Rs 5 lakh will cost Rs 64000 crore per annum to the government, raising the Rs 1 lakh cap on savings under Section 80C of the Income Tax Act to Rs 3 lakh will cost the government Rs 40,000 crore in revenue.Sources say the Finance Minister may prefer to raise the exemption limit for interest on home loans from Rs 1.5 to 3 lakh since the revenue loss won't be significant.Tax or duty hikes are unlikely in the budget, say sources as it will send a wrong signal to the voters.The retrospective tax law is unlikely to be repealed but Jaitley will clearly signal the intent to end retrospective changes. Sources are also adding that the Finance Minister will crack the whip on improving tax collection.
Comments