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StaffCorner

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07 Jul, 2014 12:53 PM

Budget 2014 : Major exemptions unlikely

Budget 2014 : Major exemptions unlikely There is a lot of hope that Finance Minister Arun Jaitley will bring in bold changes in the tax exemption limit which will come as a huge relief far the salaried class. It was earlier reported in the media that the IT exemption limit may be hiked to 3 or 5 Lakhs, deductions under section 80C to 3 lakhs and home loan interest to 3 or 5 lakhs.

But sources have indicated that it is unlikely to have any significant exemptions for the salaried class in the Budget. Sources say the government's hands are tied due to lack of fiscal space.
While hiking exemption limit from the present Rs 2 lakh per year to Rs 5 lakh will cost Rs 64000 crore per annum to the government, raising the Rs 1 lakh cap on savings under Section 80C of the Income Tax Act to Rs 3 lakh will cost the government Rs 40,000 crore in revenue.

Sources say the Finance Minister may prefer to raise the exemption limit for interest on home loans from Rs 1.5 to 3 lakh since the revenue loss won't be significant.

Tax or duty hikes are unlikely in the budget, say sources as it will send a wrong signal to the voters.



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