The Union Budget is round the corner, everybody is busy in anticipating about it. Media reports have indicated that government will try ease off the burden of demonetisation.  Here’s are some speculations.

1.       Government may increase tax exemption limit, which is Rs 2.5 lakh currently

2.       Government may reduce tax and widen tax slabs:

Rs 2.5 lakh – Rs 5 lakh ---------- 10%

Rs 5 lakh – Rs 10 lakh  ---------- 20%

Over Rs 30 lakh            ----------- 30%

3.       Rich likely to taxed more

Current regime:

15% dividend distribution tax

10% taxation on dividends over Rs 10 lakh

12% surcharge on Rs 1 crore+ income

4.       Government may relax fiscal goals to create more public investment

Fiscal year  2016 ---- Fiscal goal was at 3.9% of GDP

Fiscal year  2017 ---- Fiscal goal was at 3.5% of GDP

Fiscal year  2018 ---- Fiscal goal proposed at  3% of GDP

5.        Government may promote modify capital gain tax in equity investment

Currently, 15% tax is charged on short term gains and no tax on long term gains. The government may abolish securities transaction tax  (STT) and tax long term capital gains at 10%

6.       In a  bid to push digital India, Jaitley may impose tax on cash transaction

7.       The government may also offer subsidy on smartphones to boost digital India

8.       Incentive for the banks from the government may also come from the government

9.       More incentive for housing may come under interest subvention

10.   Jaitley may announce crackdown against gold, benami properties, cash holding etc.