The Indian economy is growing at a rate less than desired pace. The global economy is also showing stress. We expect Finance Minister Arun Jaitley to take measures to boost the economy. The deficit target for the next year may be ignored, and the deficit may be retained at the current year's level itself.
Employment and consumption, especially to the sectors in a downtrend, are expected to get a boost. Retention of Section 24 at Rs 2 lakh, or even raising it to Rs 2.5 lakh is likely.
To encourage savings for infrastructure development, the Infrastructure Bonds may be reintroduced U/s 80C, with a sub-limit of Rs 25,000, even as the 80C deduction may be increased to Rs 2 lakh, with Rs 50,000 for NPS being retained (thus giving Rs 2.5 lakh as total deduction).
In the last budget, the Finance Minister had said that DTC was being scrapped. A few DTC proposals dealing with LTCG and EET may be introduced as budget proposals. There is likely to be a common taxation of investment products, whether regular or for retirement.
Currently, any pension investment is taxed, while identical investments without the 'pension' tag have tax benefits. We hope this anomaly is corrected.
A cut in excise on motor vehicles is also expected to boost the sector. Along with realty, the automobile sector generates a lot of direct and indirect employment.
(Author Anil Rego is CEO & Founder of Right Horizons. He is a well known personal finance expert)
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