sqrrl- income tax blog title

Cool title, but what’s the news?

We will show you an overview of all major developments in the personal finance space during the week. The Union Budget is barely 10 days away and there are a lot of expectations from the Government. It is predicted that Finance Minister, Arun Jaitley, will announce major reliefs to taxpayers. Moreover, there has been enhanced expectations of sops. All of this is anticipated given the fact that the February 1, 2018 budget will be the last full budget of the Government.

? Okay, so what does it mean? 

After the upcoming budget, the country would head for the general elections in 2019. Hence, the expectations are bound to be high. There are a thousand of questions in everyone’s mind. Will the budget publicize alternations in tax slab? Will the Finance Minister provide additional relief on investments under 80C of the Income Tax Act? Will clarification be provided on investment in cryptocurrencies such as Bitcoin and Ripple? The ministry has hinted before that these are illegal in the country. Almost everybody is guessing what the Finance Minister has running in his mind. However, the demands have been increasing as well. On one hand the tax payers need relief from the strict tax slabs. On the other, Increase in limit for investment in tax-saving schemes is demanded.

? I get it, now tell me why should I care?

The bigger picture:

Every sector has their own demands from the Finance Minister. Among the major sectors seeking relief on the tax front is insurance. Sector experts feel that there needs to be higher tax incentives to enhance insurance penetration and construct a safety net in our country. “This includes a separate relief for insurance investment over and above Rs 1.5 lakh cap under Section 80C.”

Predictions such as no income tax liability for those with income less than Rs 5 lakh are also made. Some previse that there will be long term capital gains tax on the equity mutual funds and stocks. Those who don’t know, gains arising out of investments in stocks and equity mutual funds, held for more than one year are termed as long term capital gains. Presently, such gains are tax free. The experts have asked the investors to not panic. The proposals will be implemented from April 1 or later, so they will have time to decide.

For you personally:

Also, you would be curious to know about the impact on Mutual funds. The reason being, “Mutual funds have remained a favoured investment vehicle with 2017 seeing one of the highest ever inflows into fund offerings.” The expectations are that the equity market will continue to remain buoyant in 2018, preserving the investor interest in mutual funds.
For the Tax payers, income tax benefit continues to be the top expectation. A separate limit of Rs 50,000 per annum for life insurance will give a momentum to the industry that already serves nearly 36 crore consumers.

Jotting down one’s anticipations from the Union Budget is the best thing to do for many in the month of January. Now how many of our expectations are fulfilled and how many are dismissed, would be unveiled on 1st February. Fingers crossed!

Source: Money Control

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