Before presenting the final budget of the NDA government, there is a lot of challenges before Finance Minister Arun Jaitley. The government has to blow up a slow economy after the ban on bondage and GST, and investors also have to attract. Apart from this, the election of Lok Sabha elections next year and assembly of many states before elections will also attract voters in the government’s priorities.
However, this work will not be easy for the government. Policy Commission Deputy Chairman Rajiv Kumar has estimated that the fiscal deficit for the financial year 2017-18 could be more than the budget estimate. He said that the government’s disinvestment and non-tax revenue collection has been compensated to some extent, but if the populist announcements were made in the budget, then the government may have to suffer loss. Know what step of government the government can take from him.
Limit of tax deduction from Rs 2.5 lakh to Rs 3 lakh
At present, the annual income up to Rs 2.5 lakh is tax free. It is demanding to raise it to Rs 3 lakh. Most people’s eyes are on this slab, because there was no change in the last time too. With tax free income of 50,000 rupees annually, you will be able to save Rs. 2,500 per year, which is about Rs. 200 per month, at the rate of 5 per cent interest charged on it. There are about 2 crore income tax payers in this slab. Increasing the exemption limit by 50,000, the government is estimated to lose about Rs 5,300 crore. That means the government will have to suffer a loss of Rs 5,300 crore on saving your 200 rupees.
Limit of 80C to 1.5 lakhs to 2 lakhs
At present, taxpayers get a discount of up to Rs 1.5 lakh under Section 80C of Income Tax. It is demanding to increase it to Rs 2 lakh. If this happens 50 lakh taxpayers will save 50,000 or more rupees every year. With this, about 25,000 crore rupees will be tax free every year. If this is estimated to be taxed at the rate of 10.3 per cent, then the Government will have to suffer a loss of Rs 2,575 crore.
On changing the three income tax slabs
At present, there are three income tax slabs in the country. In the first slab, the annual income up to Rs 2.5 lakh is tax free. 5 per cent tax on income from 2.5 lakh to 5 lakh rupees. For people earning from 5 lakh to 10 lakh, the tax is 20 per cent tax. There is a provision of 30 percent tax on annual income of more than Rs 10 lakh annually. At present, the number of taxpayers with annual income of 5 lakh rupees is 6.22 lakhs. So if the income tax slab of 10% is increased to 6 lakh, then every year the government will get around 640 crore less in the Income Tax Collection. If the 20% slab is increased to 12 lakh rupees then every year the government can have a loss of about Rs. 520 crore.
Removing surcharges on income tax
The Indian government charges 10% surcharge on annual income of more than Rs 50 lakhs. Surcharge increases to 15% percent on income of more than Rs. 1 crore. If the government removes surcharges on high income in this budget, then the government is estimated to lose about Rs 3,500 crore annually.
It is to be seen, therefore, how much the finance minister pays before going to the election year, because of his own achievements, he will have to go to the Lok Sabha and the assembly elections.
