Resevation quota and tax
Finance minister cannot ignore this community because of the sheer numbers it represents. With the 10 per cent reservation quota proposing all up to Rs 8 lakh of annual family income as economically weaker, there’s pressure on the Centre to take provide relief in personal tax to get the non-taxable portion as close to the new Rs 8 lakh benchmark as possible.
Expect a Rs 50,000 increase in basic exemption limit to Rs 3 Lakh; Rs 3.5 lakh for senior citizens (60 to 80 years of age) and Rs 5-5.5 lakh senior citizens above 80 years of age. Working women who enjoyed a higher basic exemption limit until a few years ago are likely to be given the privilege yet again with a limit of Rs 3.5 lakh.
Raising 80C limit
Yet another effort at edging towards the Rs 8 lakh limit could be in raising the 80C limit (towards deduction in home loan payment, investments, children’s tuition fees) from Rs 1.5 lakh to Rs 2 lakh, leaving higher disposal income in hand. If the FM feels still more generous, he may even raise the standard deduction limit of Rs 40,000 to Rs 60-70,000. If the exemption towards loss from occupied house property is also raised from Rs 2 lakh to Rs 3 lakh, it would be a bonanza for the middle class.