This year Budget can bring some cheers to service class as government is likely to bring some key changes in the direct tax regime. Experts believe that the changes in income tax slabs are more likely to be introduced as government is looing for options to boost economy following a demonetization move on November 8.
A research report by SBI, Ecowrap also says that the upcoming Budget is likely to see an increase in personal income tax exemption limit, increase in section 80C exemption limit, interest exemption on housing loan and at least reducing (if not abolishing) the lock in period for bank fixed deposits.
The key changes in tax slabs can according to SBI ecowrap reports are
The report, authored by Soumya Kanti Ghosh, Chief Economic Adviser & GM, Economic Research Department, SBI noted that “such giveaways will cost Rs 35,300 crore but we expect this to be more than balanced by IDS2 revenue and cancelled note liabilities of RBI”.
Tax collection under IDS
SBI Research expects tax collection under IDS to be around Rs 50,000 crore and cancelled liabilities from RBI to be around Rs 75,000 crore.