Video Editor: Vishal Kumar & Vivek Gupta
Video Producer: Kaushiky Kashyap
The Indian economy is witnessing a slowdown and people’s expectations are dependent on the upcoming Budget this year. People are eager to know how Finance Minister Nirmala Sitharaman is going to balance the decreasing purchasing power to ensure that consumers have the money left for savings after paying taxes.
If taxes are reduced, people will have more money left, leading to increase in consumption. Consumers have been waiting for a long time for an increase in the basic exemption limit in income tax. In the first term of the Modi government, it was increased from Rs 2 lakh to Rs 2.5 lakh in July 2014 Budget.
Consumers want to save their money and the only hope they are left with is that the basic exemption is increased.
Meanwhile, India’s household saving trend is heading for a downfall. In 2011-12, household saving was at 23.6%, which has come down to 17.2% in 2017-18. The government also gets funds to invest when the domestic market grows.
The scope of the 80C Deduction of Chapter VI-A is a win-win situation for both the government and the consumers. Under 80C, for example, if your income is Rs 12 lakh and you make a full claim by investing Rs 1.50 lakh under 80 C, then the taxable income will become Rs 10.5 lakhs. Under this you will get discounts on life insurance premium, PPF account NSC, ULIP, ELSS, principal of home loan etc.
Under Section 24, consumers who want to fulfill their dream of owning a home but are reluctant will now get a discount of only Rs 2 lakh on interest.
Will the country's individual taxpayer be allowed a flat but low tax rate, forgetting the interest of home loan, discount on purchasing affordable house, 80C deduction allowances, and standard deduction? For this answer, we have to wait for 1 February.
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