More than 50% of Indian population is young and below 25 years of age. The salaried class is eager for their economic growth and social aspirations to fulfill his or her goals. The government is becoming aware that digital India is making great strides. Tax savings is one of the most sought-after agendas of salaried individuals. Witnessing this, the finance minister, Nirmala Sitharaman has transformed the budget-making process into a democratic exercise.
Here is what salaried individuals can expect from Budget 2019:
Revised Income tax slabs
Earlier this year, the government introduced a full tax rebate to taxpayers with income of up to Rs 5 lakh. This is the reason taxpayers under another cohort also expect a change in the income tax slabs in Union Budget 2019. The revision is expected to balance the rise of income tax rate of 5% to 20% for income groups between Rs 5 lakhs to Rs 10 lakhs.
Realistic employee tax benefits and allowance
In the past few decades, the salaried class hasn’t seen a hike in allowances and tax-saving benefits. It will be a great benefit to the employees if the Union Budget 2019 considers a tax compliant solution and the limits are raised for practical reasons. Currently, tax compliant digital solution that is available to the employees is Sodexo Multi-Benefit Card that helps to save up to Rs12000 as tax savings annually with additional saving worth Rs 8000 through Sodexo exclusive deals.
Women employees and job market
There is an expectation that tax exemption slab might be introduced to encourage women’s active participation in the workforce. Other expected provisions include deductions for expenses like daycare enrolment, creche facilities, and domestic help. The government’s focus in the past few budgets has been to boost tax savings for employees. One can expect policies and programs that will eventually improve job creation. This implies that the business environment will be positive, and employees can expect a healthy hiring market in the near future.
Raised section 80C limits for taxpayer employees
Section 80C limits matter when it comes to tax savings for employees. There is a demand to increase this limit from Rs 1.5 lakh to Rs 2.5 lakh or more than that. A significant hike in Section 80C limits will help provide more room for tax savings. It will also prove to be beneficial for salaried class with home loans as they will be able to avail better tax benefits on interest payouts.
Interest on PF fully tax-free
Salaried individuals have been waiting for the interest of Provident fund to be tax-free. Currently, according to the income tax laws, withdrawal from EPF before completing five years is taxable. It will be encouraging for salaried class if withdrawal from EPF becomes tax-free.
The finance minister will present the budget on July 5. Salaried individuals are expecting some tax relief in the announcements this time. Considering the inflation and increased the cost of living in major metro cities, the government might look into it and come up with tax compliant solutions that will eventually increase exemptions for various investments. The Union Budget will subsequently have its effects on everyone, right from corporate firms to salaried class of the country as it can impact the financial situation for the rest of the year.