“Union Budget 2017 will be presented in the backdrop of Demonetization thus changing the economic and political dialogue in the country. From this much anticipated Union Budget, it is expected that Government may announce simplification in Income Tax laws in line with the suggestions of Income Tax Simplification Committee, which will make Indian tax laws more competitive with respect to global economies.
On direct tax side, Corporate Tax rate is expected to come down to meet the target to reduce Corporate Tax to 25% in 4 years, announced by the Finance Minister in his budget speech last year. Individual Income Tax exemption limit and corresponding changes in income tax slabs are also expected which will give greater disposable income in the hands of tax-paying households.
Government may continue its focus on e-payment and employment generation and may offer additional sops in this area.
Union Budget should move annuity out of tax bracket to provide relief to almost 10 crore senior citizens of India thus addressing the long-standing need for streamlining Tax Saving vehicles.
To bring parity in all retirement products and to provide a bouquet of social security products to senior citizens, additional exemption limit of Rs. 50,000 under NPS should be extended to Life Insurance Products as well.
In order to help Indian households create a portfolio for their long-term needs, it is recommended that the Budget should create a separate limit for the deductibility of life insurance premium under 80C, which should be over and above the existing limit. Any prospective revenue loss due to this additional limit will get amply compensated by tax revenue from new entities/individuals expected to come under the income tax scanner post demonetization.”
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