Individual taxpayers are expecting the government to provide some tax reforms which will boost their purchasing power and stress less about the taxes. In order to make the Budget popular, it is possible that the government may continue with the rebates introduced last years such as standard deduction of Rs 40,000, rebates on medical expenditure, and interest earned on savings income.
The government could look at areas like the National Pension System (NPS) as well as provide relief to senior citizens. Another area the government could focus on is providing incentives for digital payments which would encourage electronic payment as well as reduce the cash settlements.
Currently, the housing cost is very high and interest on housing loans are very high as well especially in urban areas. Therefore, the govt could revisit the current deduction which is restricted to 2 lakhs for individuals. They could look at enhancing the limit from Rs 2 lakh to Rs 3 lakh. The other area they could look at is increasing the standard deduction from 30 per cent to 40 per cent on rented properties. This would mean encouraging housing rentals as well as it would cover the maintenance cost of individuals.
Budget 2019 may borrow farmer-incentive templates from states to address the agrarian crisis. Despite the upcoming budget being interim, the timing of the annual exercise makes it imperative that it will be loaded with policy intents to get the voter attention for the forthcoming general election.