Budget 2017: Post-demonetisation, experts predict raise in tax exemption, deduction limits

With the Union Budget 2017-18 just around the corner, several experts reveal what they believe the Budget has to offer. This Budget is like none other as it comes post the demonetisation announcement, a decision by the government that has caused a shift in the pattern of the financial sector in India.

Now, experts say that the government expects demonetisation to improve tax mop-up. The benefits of this could mean raise in exemption limit to around Rs 3 lakhs and the deduction limit under Section 80C to Rs 2 lakh. 

According to the Economic Times, citing PwC comments, the basic exemption limit could raise to Rs 3 lakh for individuals less than 60 years from the current limit of Rs 2.5 lakh. For those over 60 years of age, it could be raised from 3 lakh to 3.5 lakh.

In fact, several experts want the government to consider raising the deduction limit under Section 80C. It is under this section that there are considered to be broader investment options such as loans, children education expenses and so on. So, it is difficult for people to get invest more to save taxes. 

Many believe that the Union Budget 2017 could bring refreshing changes, especially considering demonetisation effect. One among them was Soumya Ghosh, Advisor of the State Bank of India told the news site that the upcoming budget could bring in the 'much needed boost' post demonetisation. Some other sops that are widely expected include interest exemption on housing loans raised from 2 lakh to 3 lakh, and the locking period related to bank fixed deposits to change from five years to three years.

Besides, many expect the government to take further measures as it goes on the path of cashless economy. So, measures could essentially aim at pushing digital economy, which could include incentives for merchants promoting use of plastic money and income tax benefits for those who offer e-payments option. 

• Tax
• Budget 2017 -18
• Budget 2017
• Union Budget 2017