People paying income tax likely to be big gainers of Budget 2017

Budget 2017 is likely to have some sops for the common man who pays income tax as the Indian Government wants to soothe wounds of demonetisation.

It is expected Finance Minister Arun Jaitley will increase the exemption limit of Rs 2.5 lakh and announce wider tax slabs.

The government, in its fourth budget, wants to boost the economy by concentrating on corporate and personal income tax.

The government in its Budget 2017, which will be announced on Feb 01, will speed up 25% corporate tax rate and announce relief for small taxpayers who have backed demonetisation.

"The focus this year is on direct taxes. With the goods and services tax (GST) to come from next financial year, there isn't much to be done on the indirect taxes side. The customs duty structure could see some changes," a senior government official involved in the deliberations told ET.

"This would mean more moderate tax rates (corporate as well as personal) and tightening of income disclosure norms. Thus, the minimum exemption income limit could be hiked and slab rates in the middle reduced further," Sudhir Kapadia, national tax leader, EY told ET.

Last year, Jaitley had announced Modi government’s intention to lower corporate tax to 25% over four years, while phasing out exemptions.
New manufacturing companies set up after March 1, 2016, were offered an option of 25% tax plus surcharge.