The Union Budget 2017 will be presented in the month of February. This is a whole month earlier than usual. When the Finance Minister Arun Jaitley, presents the Union Budget 2017 on February 1st, this could be his toughest and most keenly watched Budget. The Government also wants to reward you and other citizens after the pain of demonetization. Watch out for some tax sops for the common man and the salaried class in Union Budget 2017.
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You and the common man, badly want the Government to raise the basic exemption limit on personal income tax, for citizens below 60 years of age. The basic exemption limit currently stands at INR 2.5 Lakhs a year. If the Government raises the basic exemption limit to INR 3 Lakhs a year or even INR 4 Lakhs a year, there will be more disposable income in your hands and also in the hands of most citizens around.
What will you do with all this extra money? Spend it…of course. This will bring a spark to the economy, it so badly needs.
You get a tax deduction up to INR 1.5 Lakhs a year under Section 80C, if you invest your money in certain tax saving instruments. An investment in PPF, NSC, ELSS, 5 year tax saver FD, premiums paid on life insurance plans, investments in the new pension scheme and some other investments, enjoy this benefit. You get a tax deduction up to INR 1.5 Lakhs a year, under Section 80C of the income tax act, on the EMI (principal) of your home loan. You can also claim a deduction on the tuition fee, paid for up to 2 children for their education. This is a single deduction under Section 80C up to INR 1.5 Lakhs for all these investments.
You and the common man want this limit under Section 80C to be raised from INR 1.5 Lakhs to INR 2 Lakhs a year. This will encourage you to save and invest for your insurance needs, retirement needs and also for financial goals. This will also help the mutual fund industry, insurance sector and small saving schemes like PPF, postal saving schemes tap funds, as more money flows into these sectors.
After demonetization, you and many citizens avoided availing home loans. Banks want the Government to give the common man tax benefits on home loans and encourage them to avail home loans. Most private and public sector banks and even housing finance companies, have reduced interest rates on home loans.
Now all banks and yes, even you and the common man, want the Government to raise interest exemption on home loans under Section 24, from INR 2 Lakhs to INR 3 Lakhs. Now, you and other citizens would be persuaded to avail home loans which would boost the banking sector and also the financial services sector in India.
You get tax benefits up to INR 1.5 Lakhs a year under Section 80C, if you invest in the 5 year tax saver fixed deposit. You don’t get this benefit if you invest your money in any other fixed deposit. After demonetization, banks are flush with money, as citizens deposited their old 500 and 1000 rupee notes. Having a lot of money to lend, banks cut interest offered on fixed deposits.
Now, why would citizens invest in 5 year tax saver FD’s, when interest rates offered are so low compared to small saving schemes? It would be great if the Government reduced the lock-in of 5 year tax saver FD’s to just 3 years. This would encourage you and other citizens to invest in 5 year tax saver FD’s.
The Union Budget 2017 is just 2 days away. The long wait is finally over. It’s time to hold your breath and grab all those goodies the Government will most probably give you in 2 days time, as the Union Budget 2017 is presented in the Parliament. Be Wise, Get Rich.
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