Interim finance minister Piyush Goyal is set to present Narendra Modi government sixth and final Budget today.
On the tax front, this time, the focus is going to be on direct taxes rather than indirect taxes. Indirect taxes, a lot of them are covered under goods and services tax (GST) and on the corporate tax side, will not affect voters directly.
If you believe that this is a budget aimed at voters ahead of the elections, it is very clear and many in the industry is also not expecting much on the corporate tax side or the indirect tax side either. It is focused on the direct tax.
The direct tax code report is due by the end of February this year. The finance minister in the budget, very broadly, may say that while "we have addressed so much and done so much on the indirect tax front, on the direct tax side, the report is due now, so wait for it and we do not want to make any big bang changes at this point in time."The standard expectations:
- IT exemption limit could be raised from the current Rs 2.5 lakh per year.
- Threshold for peak tax rate which is 30 percent and which applies over Rs 10 lakh may be increased to Rs 15 lakh or Rs 20 lakh.
- Increase limit in the section 80c from current Rs 1.5 lakh.
- Raise the cap on set-off from loss from house property.
- Tax incentives to MSME sector.
- More clarification on angel tax is required.