The Finance Minister Arun Jaitley, will present the Union Budget 2017 on February 1st. The Union Budget 2017 is just 10 days away. Printing of the Union Budget 2017 documents have already started with the annual ‘Halwa Ceremony’. What’s special about this Halwa Ceremony?
Halwa is prepared in a big ‘KADHAI’ and served to the staff of the Ministry. Once this dish is served, officials and support staff who are directly involved in the making and printing of the Budget, would have to stay in the Ministry and remain cut off from their families. Except for very senior officials in the Finance Ministry, most of the officials and support staff, cannot even contact their family/near and dear ones, over the phone, email or any other communication, until the Finance Minister finishes presenting the Union Budget 2017 in the Lok Sabha.
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Income Tax Slab For FY 2016-17 for citizens under 60 years
The Government scrapped 500 and 1000 rupee notes on November 8th 2016. The aim of this move was to break the back of corruption and terrorism in India, funded by black money usually hidden in 500 and 1000 rupee notes. However, the common man had to bear a lot of suffering, by standing in long queues at banks and ATM’s.
The common man was willing to bear this suffering to destroy black money in the economy. The Government now wants to reward all citizens who have patiently stood in long queues. The Government could raise the basic tax exemption limit for citizens under 60 years from INR 2.5 Lakhs to INR 4 Lakhs. This will give citizens more disposable income in their hands, which is sure going to make them, VERY HAPPY. They would spend this money and give the economy the boost it so badly needs, after demonetization.
You get an exemption for conveyance/transport called conveyance allowance, up to a maximum of INR 1,600 a month. This allowance is given to you by your employer for commuting expenses from your home to office. The CII (Confederation of Indian Industry), wants this tax exemption to be raised from INR 1,600 a month to INR 5,000 a month.
Transportation costs have increased. This allowance should be given matching the times. The Government had raised conveyance allowance limits from INR 800 a month to INR 1,600 a month in the Union Budget 2016. You could expect the conveyance allowance limits to be hiked from INR 1,600 a month to INR 3,000 a month.
If you are a salaried employee, your medical bills are reimbursed by your employer. The reimbursement for medical expenses which your employer gives you, is tax exempt up to INR 15,000 in a financial year.
Hospitalization is very expensive. There is a need to increase the maximum medical reimbursement limit from INR 15,000 to at least INR 30,000 in a financial year.
You get a tax deduction of INR 2 Lakhs a year, under Section 24 of the income tax act, on the EMI (interest) of your home loan, if your property is self occupied. What if the Government increases this limit to INR 5 Lakhs? The tax deduction limit for the interest paid on a home loan under Section 24, could be increased from INR 2 Lakhs to INR 5 Lakhs a year.
You get deductions under Section 80C, up to INR 1.5 Lakhs a year, if you invest in certain tax saving investments. You can invest in PPF, EPF, ELSS, Post office schemes, 5 year tax saver FD and claim this benefit. The premiums you pay for life insurance plans up to INR 1.5 Lakhs a year, enjoys this benefit. You can also claim a deduction on the tuition fee, paid for up to 2 children for their education.
Your total investments in all these tax saving options combined, enjoys deduction up to INR 1.5 Lakhs a year, under Section 80C. You could get a tax deduction under Section 80C up to INR 2.5 Lakhs a year, after Union Budget 2017.
Children’s tuitions fees in Private schools and colleges are very high. The tax deduction of INR 1.5 Lakhs a year, is definitely not enough. If the tax deduction under Section 80C is raised, you will be able to invest more money in ELSS, PPF and other tax saving instruments or avail more life insurance. This would boost the economy.
The suspense is soon going to end on February 1st 2017. Perhaps, some of your wishes may be granted. It’s time to get your wish list ready for the Union Budget 2017. After the pain of demonetization it’s time for a dream budget for the common man.
Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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