Mumbai: Tax experts hailed Budget proposals to raise income tax exemption cap to Rs 2.5 lakh, tax rebate on interest portion of home loan to Rs 2 lakh and investment sops of Rs 50,000, saying this will help increase savings and higher disposable income.
KPMG India personal taxation partner Vikas Vasal said, "Tax relief provided to individuals is welcome especially when the government faced tough macroeconomic situation." "The increase in basic exemption limit from Rs 2 lakh to Rs 2.5 lakh will benefit all individuals, while increase in tax deduction under Section 80C from Rs 1 lakh to Rs 1.5 lakh will help achieve the twin objectives of encouraging the households to make long-term savings, and also increase overall savings rate which has fallen considerably over the last five years," he said.
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On increase in deduction for interest paid on housing loan from Rs 1.5 lakh to Rs 2 lakh, he said it will provide a boost to the housing and banking sectors and increase job opportunities for unskilled and semi-skilled workers. EY tax partner Paresh Parekh said the increase in personal tax exemption limit coupled with increase in 80C savings related deduction limit should put more disposable income in the hands of consumers. On the hike in housing loan interest exemption limit, KPMG's Vineet Agarwal said this move gives a savings of Rs 5,150 to individuals annually and Rs 5,665 for super-rich.
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The minister also mentioned about providing thrust to low-cost housing sector which should be a win-win situation for individuals availing loan to buy property for themselves. On changes on the indirect taxes front, Dharmesh Panchal of PwC India said the Budget has taken a major step towards certainty in tax legislation by extending advance ruling to resident assessees and by providing a forum to address the issues faced by industry.
"The Finance Minister has promised action during the year to resolve various issues on GST. The Budget has also taken steps to address inverted duty structure for specified sectors, rationalisation of duty rates, review of negative list and exemptions for services. Overall, the Budget reiterates the government's commitment for tax reforms and clarity in tax legislation," he said.
