Checkout Income Tax slab post Budget 2020

The new tax slabs increase the minimum taxable limit from ₹2.5 lakh to ₹5 lakh. At the other end of the segment, anyone earning more than ₹2 crore annually will be subject to 35% tax rate instead of 30%.

Union Finance Minister Nirmala Sitharaman is all set to announce the Union Budget 2020. She will have to balance a billion expectations with a slowing economy - compounded by high inflation, and job crisis.

The individual taxpayers too have a set of grievances they want the government to address.

1.Increase tax break under section 80C

One of the first expectations that Indian taxpayers keep with the government is to “increase the threshold limit under sec 80C, minimum from ₹1.5 to ₹3L,” says Mansi Menda, tax payer.

Under section 80C, an individual is allowed a maximum deduction of ₹1.5 lakh from the total gross income with respect to the sum paid or deposited in specified schemes. If this is increased, taxpayers would be able to save more and pay less income tax.

2. Higher medical insurance tax exemption

Under section 80D of the Income Tax Act, a taxpayer is allowed to claim a tax deduction of up to ₹25,000 per budgetary year for medical insurance premium. However, the citizens would have their ears and hopes on Sitaraman’s speech to remove the current limit and allow the redemption of actual premium paid.

Since insurance premiums are expected to go up, it will help taxpayers save on tax, and have more left for other expenses.

3. Higher-income tax exemption limit

One of the most significant expectations a taxpayer keeps from the “Budget 2020 is to increase the income tax exemption limit from ₹2.5 lakh to at least ₹5 lakh”.

The change in the tax slab was also proposed in the last Budget but was not implemented in the current financial year. However, the people have proposed again to increase the tax exemption limit in the coming financial year.

4. Deduction in the Tax rate of Long Term Capital Gain

In 2018, the late finance minister Arun Jaitley imposed a 10% long-term capital gains (LTCG) tax imposed on profit above ₹1 lakh. The industry experts expect the government to scrap or deduct the tax rate on long term capital gains.

This would help investors save tax on the extra income that has come in from stock holdings and other sources.

5. Eradication of Dividend distribution tax

The DDT is the levied tax on the company’s dividends distributed from the company’s profit. The company’s pay DDT up to 20% on its profit and at a later stage if the income exceeds ₹10 lakhs per annum then they have to pay 10% income tax.

The abolition of taxes will result in higher distribution of dividends will encourage more companies to give dividends, helping investors gain more.

6. Home loan/ Personal loan

As interest rates are on the rise and consumer confidence is at a low, the realty sectors and home buyers seek more tax relief from the government.

“Ma’m kindly consider restoring tax rebates on the interest of ongoing home loans,” says Yash, who has been paying the home loan for the last 20 years.

7. GST on under constructed homes

At the moment, under-construction homes are charged GST at 5% without income tax credit, the common man expects the budget 2020 to scrap or reduce the percentage.

Moody’s in a report last year showed how a reduction in GST from 12% to 5% boosted the industry. And a further fillip is necessary to encourage home sales.

SEE ALSO: Live Union Budget 2020