Modi government 2.0 is all set to present the second budget of their second term. This budget has been one of the most talked-about budgets because the Indian economy is bit tasseled right now and various industries like automobiles are suffering from huge downfall. Plus, some external factors like the US and Iraq turf and a global recession have been troubling the Indian economy a lot.
So, in this gloomy economic situation, everyone is looking at the kitty of Nirmala Sitharaman who will present her second budget. Where corporates are expecting some rebates, on the other hand, common salaryman is looking forward to rejigging in tax slabs. Every section has different expectations from budget 2020 like –
Common Man Wants Rejig Tax in Tax
The common man has voted for the Modi government because they were expecting great income tax reforms from this government. But, apart from a major change in 2014, this government has done nothing for a common man. The government might have given few incentives here and there, but no solid difference in the tax slab has been made by the government by far. So, one common man is once again waiting from budget 2020 to show mercy on his pocket, but that seems tough in the prevailing condition of the banking sector.
More Room Under 80C Deduction
The deduction of 80C has been a great window for taxpayers to save up some of their hard-earned money. But, it is the demand of the banking sector that the provision of 1.5 lakhs deduction under 80C needs to be at least increased up to 3 lakhs so that the habit of saving among people increases which will eventually grow banking sector. The last modification in this deduction was made in 2014 when the limit of 1 lakh is increased up to 1.5 lakhs. But, present economic conditions demand some relief to taxpayers so that their consumption capacity can be improved.
Abolishment of Dividend Distribution Tax
When we are looking for global investors, then it is expected by shareholders and investors that the government will think about abolishing the dividend distribution tax. Presently, a shareholder has to pay 17.65 percent on any dividend received. Moreover, if the amount of paid dividends exceeds 10 lakhs, then shareholders have to pay an additional 10 percent on it. So, there is not much room for investors to earn here, but if the government removes this tax, then this will be a great boost to the business sector.
No Tax on Unsold House
The real estate sector in India is dying very quickly and in dire need of a lifeline. And, it is expected by real estate professionals that the government should remove tax from unsold houses so that the property market can flourish better. Real estate is one of the most business sectors because to build one house lots of resources and manpower is used that provide a boost to a number of other business industry. So, the real estate market needs something in budget 2020 and this tax reform can be one of the important push here.
Change in Capital Gain Tenure
The budget 2020 has been expected to announce major changes in the capital gains rules as preferential treatment of capital gain tax and duration is hitting the investment pattern. This is a demand of the business industry for a very long time now that tenure of capital gain should be modified by the government. So, it is highly expected that the government might announce some changes in the holding period norms and tax treatment of long term capital gain.
Everyone is expecting something from budget 2020, but only a few will get what they want because the present economic condition doesn’t offer much room to make changes. But, still, it’s the responsibility of the government to offer something to everyone so that some relief can be enjoyed by all.