The 2017 Budget is going to be momentous and historic in many ways. For starters, in a move away from the convention followed in the recent past, the date of the Budget presentation has been advanced to February 1st. Not just that this is also perhaps the beginning of a fresh trend where the Rail Budget and the Union Budget would be consolidated and presented together.
The pain of the demonetisation might seem some kind of redress in the form of many tax sops. Given the higher tax collection thanks to demonetisation, the expectation is that the Union Budget might afterall look at reduction and recalibration of the tax slabs. Tax slabs for levy of income tax and higher rate of interest tax is expected to be raised. The popular consensus seem to be the that the tax exemption slab might be raised to Rs 3 lakh.
Additionally modification in current direct tax norms is also high on the expectation list. The argument that’s been gaining currency is that a lower tax rates as seen in many other economies might actually be more effective and have greater potential to bring in better revenues and also broaden the tax base.
In keeping with the Government’s digital initiatives, the other expectation seem to be that more incentives could be in the offing for those embracing the digital payment technology. Further in keeping with the target of creating a cashless economy, the government might announce more sops in this direction. The overall idea seems to be that the sops could be directed towards discouraging cash transactions and promote cashless transactions as much as possible.
Corporate tax structure too might see some tweaking to not just increase the collection but also broaden the base. This is particularly significant given the fact that it was barely 19% of the Government’s total tax collection last financial year. As a result some experts believe that corporate rates might be actually lowered to remedy this situation.
Apart from a revamp of the tax structure, the other big expectation from the Budget seem to a definitive implementation plan for the GST. A significant bone of contention between the Centre and the states, this Budget is expected to spell out a clear roadmap for this.
Creating sops for affordable housing and exempting capital gains on immovable property is another big expectation from the Budget. All eyes are now on brown briefcase that would reveal all the secrets on Feb 1.