According to economists, the authorities could increase this limit further to incentivise buying housing properties for fostering demand in the industry. Someone can claim this deduction from the year in the building of the home is completed. More tax advantages towards healthcare Income tax exemption limit Tax-free bonds may witness a comeback Higher income tax deduction One of the key aims of the authorities in the budget will be to enhance infrastructure jobs as it holds key to boosting job growth and pushing up demand.
Since the real-estate industry has been affected negatively because of a demand slowdown, the government could offer more tax benefits to buyers and provide a much-needed increase to the industry. But, people should notice that such a movement is unlikely given the economic delinquencies which need to be tackled by the authorities. While the government may not honour all their requests, it is very likely to take particular steps to facilitate taxation on the middle-income group.
Economists imply that not many changes will be introduced in tax given the current financial situation. Greater deduction on home loans The tool will help the authorities raise capital through government entities for infrastructure projects. Such bonds are known as’tax-free’ as the interest earned on them isn’t taxable. The limit could be increased from the present Rs 25,000, related to individuals aged below 60 years, under Section 80(D).
The concession could also be raised under Section 80(D) for individuals over age 60 years. The present limit of exemption for individuals over 60 years is Rs 50,000. Individuals exempting a increase in exemption limit may end up being disappointed however, the government could cheer them up by introducing greater deductions under many sections of the Income Tax Act. In such a scenario, it wouldn’t be a surprise when tax-free bonds witness a comeback. The income tax deduction permitted under Section 80(C), now at Rs 1.5 lakh, might be raised to Rs two lakhs or above.
They have demanded the government to increase the overall tax exemption threshold or present tax breaks to reduce strain in their home expenses. Since a full tax rebate up to Rs 5 lakh was released under Section 87A at the interim budget, it’s not likely that there will any other change in the exemption. But citizens and many industry bodies want the government to boost the tax exemption threshold from the existing Rs 2.5 lakh to at least Rs 3 lakhs.
But, tax experts said the government may present some sops to improve demand and speed up economic growth. Having said that, here are a Couple of likely income tax changes which could be announced by Nirmala Sitharaman: Considering that the government would like to grow the nation’s tax base, such a move is highly improbable. There are high chances that the government will boost deduction under tax saving instruments offered in healthcare.
Industry bodies have already asked the government to boost tax saving under Section 80(D) of the Income Tax Act. Many are hopeful that the government would make amends to increase the limitation but it would cause a reduction in the current tax base as more individuals will be exempted from paying income tax. The majority of the requirements which have been suggested in the run-up to July 5 pertain to reduce taxation, especially those belonging to the middle-income group.