Tuesday, 24 February 2015

Budget 2015 Expectations

The Budget for financial year 2015-2016 is to be announced on 28th Feb 2015. Here is my quick analysis.

People's Expectations : The greatest expectation from FM Jaitley is for tax benefits. Most of the people, I have communicated with, will be pleased if FM makes some modifications in the tax slabs.
The biggest expectation is to increase the tax slab from existing 2.5 lacs to at least 3 lacs. Some are even expecting it to go upto 3.5 lacs.
The next expectation is to increase the exemption limit under 80C from existing 1.5 lacs to somewhere between 2.0 lacs to 2.5 lacs.

My Personal Opinion : In my personal opinion, FM will definitely try to make the tax payer happy but in his own style.
FM might consider making modifications to the existing allowances like
1. Conveyance allowance (currently Rs. 800/month.) - due to rising transportation cost
2. Medical allowance (currently Rs. 15,000 /year ) - due to rising medical and healthcare cost
3. HRA - due to sky touching rents especially in the metro cities.
FM might also remove the existing tax credit of Rs. 2000 (tax rebate given to individuals whose net income is less than 5.0 lacs) and instead increase the No tax slab from Rs 2.5 lacs to 2.7 lacs If this move takes place, then following are the implications :
1. Upto 5.0 lacs (No extra saving on tax)
2. Greater than 5.0 lacs (Rs. 2,000 savings in taxes)

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