Tax relief is expected both by personal income tax and corporate tax payers in the Budget 2018. One of the most anticipated developments from the Budget 2018 is revision of the tax slabs. There have been proposals made to the FM for revision on both tax slabs for personal income tax payers and reduction of tax rates for corporate tax payers. In all the surveys conducted by various media houses and financial bodies, it is widely believed that the raise in basic exemption limit on personal income tax is a done deal. Other than that, there are also various other expectations and desires of various sectors and entities from the FM. For common man an increase in the exemption limit under Section 80C, increase in medical reimbursement component, tax sops for investment in life, health insurance and pension plans and tax sops for first time home buyers are also on the wish list of many. Due to prevailing fiscal challenges the government doesn’t have much room for manoeuvring; the government will have to somehow keep the revenues generated from taxation intact. One of the ways of doing the same is through reintroduction of long-term capital gains (LTCG) tax on equities in place of securities transaction tax (STT) or along with it. But other than these issues, the two big decisions that the FM will have to make will be about personal and corporate tax rates.
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