New Delhi: Every year when the Union finance minister presents the Budget speech, the ‘salaried people’ looks to him with expectations for reducing their tax liability.
It is possible that there would be some moves in this regard in the coming one.
The salaried people could get some relief as finance minister Arun Jaitley is likely to raise the minimum income threshold for paying personal income tax for those below 60 years of age to Rs 3 lakh a year from Rs 2.5 lakh at present and the deduction limit under Section 80C to Rs 2 lakh in the Union Budget for 2017-18, multiple sources told The Sen Times.
Currently the tax exemption slab is at Rs 2.5 lakh for individuals below 60 years, while deduction under Section 80C is Rs 1.5 lakh.
Union Finance Minister Arun Jaitley raised the personal income tax exemption limit from Rs 2 lakh to Rs 2.50 lakh on July 11, 2014 in the Union Budget for 2014-15.
Jaitley may also raise section 80C deductions limit to Rs 2.0 lakh, the sources said.
This move aimed at boosting household savings. The hike in deductions limit for investments by individuals in financial instruments to Rs 2.0 lakh would come as a sigh of relief for the salaried people blatting high inflation.
Investments under Section 80C up in popular tax saving instruments such as the general provident Fund, public provident fund, NPS, national savings scheme, unit-linked insurance plans and equity-linked savings schemes are not taxed up to the allowed threshold.
Section 80C was introduced by the UPA government in 2005-06 with a limit of Rs 1 lakh but UPA government did not revised it since then. Jaitley raised it up to Rs 1.5 lakh in the Union Budget for 2014-15.
Deduction on payment of income tax on interest paid on loans for self occupied houses may be also raised to Rs 2.5 lakh from Rs 2.0 lakh, the sources added.
Union Finance Minister will present the Union Budget on Wednesday.