How To Plan Your 
Retirement at Various Life Stages?

Plan Ahead For Your Golden Years. Grab This "Retirement Planning" Free eBook .

Just Fill In:

Budget 2017- What We Expect?

Budget 2017 is around the corner and all of us are eagerly waiting for it after the demonetization of old Rs.500& Rs. 1000 notes. Lots of expectation are being built up considering the way budget 2017 is being presented. Firstly,  it is preponed to 1st Feb instead of 28th Feb as we have held in the past and secondly the railway budget is now going to be included in the Union Budget 2017.

Union Budget 2017- What We Expect?Already there are questions and expectations which are being presented in different forums. Considering the thrust on black money and move for digitization Will there be more benefits for the general public or the rules will be tightened? The confusion is gaining ground and there can always be surprises.

So let’s review our expectation based on what events we have witnessed in recent past and what is coming out from the views of the government.

The Long Term Growth

In the last few budget, there was more focus on sectors which can give a boost to our economy.  Infrastructure was primary and we saw huge allocation given to this sector. Similarly, there were schemes for the poor and underprivileged which needed to be addressed if India has to really grow. There is no doubt that the thrust will continue in this year budget too. But knowing that infra projects or any schemes take a longer term to present its benefits How much allocation and in what manner we will come to know on the day of the budget.

The Black Money

This is going to be the biggest challenge. The government is expected to bring measures which can reduce the black money in circulation and India can move towards more digitization. If not all but one can expect reducing limit for holding cash in hand and quoting your PAN numbers. The Jan Dhan Account which got attention due to huge cash deposit may see some curbing through the budget. Since digitization is the alternative to reduce cash circulation in the economy there are expectations that the budget will bring measures to promote this.

The Pradhan Mantri Yojna

To Provide social security benefits to the poor and unorganized sectors, the Pradhan Mantri Yojna were launched. This included Life insurance, Health Insurance and  Pension Yojna. Then there is Swatch Bharat Abhiyan which has been the major thrust of the Government. We may see more allocation toward these schemes as the thrust will continue to increase the reach.

Personal Finance

This is an important area and interest to all of us. Will we see goodies in this budget? Will the personal tax limit get reduced? What deductions will see more soaps and many other questions are circling around us. But we have expectations and what actually comes out in the budget we will know only on the budget day. Still, based on what events have occurred in last few months there is always a probability of what government may do.

The first is the personal taxation. There are 2 issues to address here. On one side the government needs to bring more people under the tax scanner while at the same time more benefits to be rolled out for honest tax payers. Thus, we might see some changes in personal taxation which can meet both these objectives.

Then there was the speech by Honorable Prime Minister where long-term capital gains in equity got mentioned and taking cue from that speech it is expected that long-term capital gains in equity will come back. But whether it comes for the entire market or only for the unlisted firms to capture tax evasion is still to be seen. However, considering that long-term capital gains tax on equities may deter investors in a scenario where retail participation has started as an alternative the definition on long-term capital gains holding may be changed to three years instead to 1 year much like it was done in last year budget for non-equity products.

My  Expectation

Surely we have more expectation than what the government may be thinking. There is home loan deduction, benefits on HRA, LTA, Saving Interest exemptions of Rs 10000 etc. which I would wish to continue but with more soaps. Every year government comes out with new avenues for retail investors like infra bonds or tax-free bonds which should be continued. We have seen tax free bonds for few years but with decline in interest rate they may not appeal now. So when the government is laying thrust on this sector why not bring back tax saving infrastructure bonds with a little bit more than previous exemption of Rs 20000.

But one expectation which I have year on year is benefits for specially abled. With passing of Disability Bill 2016 government had made a great start. What lacks now is specific avenues for saving for the future of special need child much like present in developed countries. It’s time for the government to take this step. Increase the health insurance benefit and bring specific investing avenues for special needs children families.

The expectations will always be high but the government act is to create a balance. Surely one budget cannot roll out all goodies we want and will be eager to see what comes out finally.

See you on the Budget Day for the analysis!!!

image courtesy: www.freedigitalphotos.net

Budget 2017- What We Expect? by