Here are some of the changes which may be proposed by the Finance Minister in the Union Budget:
1. Increase in basic exemption limit
Presently, taxpayers whose taxable income is up to Rs 500,000 are not liable to pay tax due to the rebate of Rs 12,500 available to them.
It is expected that the basic exemption limit of Rs 250,000 may be increased to Rs 500,000; to provide relief to all taxpayers in Budget 2019.
2. Increase in Chapter VIA deductions
The Chapter VIA deductions which allow taxpayers to claim deduction of specified investments and/or expenditures while computing taxable income was enhanced in 2014.
The Finance Minister may enhance the limit of Rs 150,000 to Rs 200,000 to provide impetus to specified investment/ savings.
3. Rationalisation of taxation of National Pension System (NPS)
It is expected that the Finance Minister may propose to rationalise taxation of withdrawal from NPS and make it consistent with taxation rules for other retirement savings options like Employees’ Provident Fund and Public Provident Fund.
4. Increase in limit of exempt capital gains from sale of long term equity shares
Until the previous year, long term capital gains earned on sale of equity shares or units of equity oriented funds were exempt from tax. Thereafter effective from fiscal year 2018-19, said gains were taxable at a rate of 10% on gains in excess of Rs 100,000. To attract more investors in the equity markets, it is excepted that the limit of exemption of Rs 100,000 may be increased.