As February 1 comes close a lot of buzz is taking place about what the Finance minister of India is going to place on the table for all the masses of the country. With 2019 Lok Sabha elections coming close it will be foolish to expect any big courageous announcements from the government. Government has already started the process of taking recommendations from the industry experts and economists, by now even budget drafting process also might have started. So, what's the general public and industry of India is expecting? Let's take a sneak peek.
Reduction in Income Tax Rates:
Expectations regarding increase in basic exemption limit from Rs 2.5 Lacs to Rs 3.0 Lacs is on the rise. It is also expected that tax rates might be reduced for he first slab to 5%. A slight increase in surcharge would be expected for high income group (Individuals earning more than Rs 10 Lacs) However, the rebate under section 87A might be scrapped.
Deductions under 80 C and Chapter VI:
The prolonged decision on increase in 80C deduction limit can be finalised in this budget. Government may please the common man with this clause. 80 D Mediclaim may also be increased. Other deductions may remain the same.
House Property:
Under house property the deduction for interest on loan repayment might be increased upto Rs. 2.50 Lacs.
Reduction in Corporate Tax:
Currently, a Domestic Company is taxed @30%. The rate might be slashed for SMEs to 20% or less without any riders. Company is required to pay a Surcharge of 7% if the Total Income exceeds Rs. 1 crore this provision might be scrapped. We might also see slight relaxation in provisions of Corporate Social Responsibility u/s 135 of the companies act.
Yes/No for Cryptocurrencies:
Cryptocurrencies are the talk of the year. Indian government has remained silent on the status of these currencies. In this budget the government is likely to make its official stand and the chances are high on banning the cryptocurrencies.
Cutting down on Excise Duty on Petrol and Diesel:
When the Modi Government came into power in 2014, it was blessed with reducing prices of crude oil. Now, the tables have turned the government has to tackle an increase of $45 / barrel (approx.) to $ 65 / barrel from July 2017 to January 2018. The rise in crude oil prices is the biggest contributor of inflation in India, hence a reduction in duty can be expected. Hence a reduction in excise duty might be on the way.
GST on petrol and petroleum products:
Already the talks have begun about inclusion of GST on petrol and petroleum products. GST council is also positive on inclusion. Government might make its stand clear on the same.
Electronic Vehicle policy:
Government may frame guidelines for automotive sector for implementation of manufacturing of electric vehicles. As India is a consumption based nation and uses petrol on a massive scale this new beginning will be worth watching. Let's see how government formulates this policy.
Relief for Farmers:
As growing number of Farmer's suicides and cases of farm loan waiver are on the rise, government may come up with minimum farm pricing policy. The base level prices for all the crops might be established to support the farmers.
Banking Revolution:
After demonetization there has been quite rise in digital transactions. However, the rise which government was expecting it was not that high. Hence, government may make compulsory some transaction digitally and may pave way for extinction of paper transactions (Like Cheque Books).
There are many more expectations from different types of industry experts and economists. This government does many things catching experts off guard. Finance Budget might be on the same line. But, as per my take this budget will be a populist one not reformists.
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