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New Delhi: The first break came in when Finance Minister Arun Jaitley announced the budget on February 1st, 2017 instead of at the end of February as his predecessors had done. The changes introduced by the Modi government have shaken the country.

In the year 2017 the biggest tax reform happened earlier during the year with the introduction of the Goods and Services (GST). Now as we have stepped into 2018 and preparations for the Union Budget 2018 approach, changes expected from the government, in its final budget, before the elections begin in early 2019.

The government is likely to provide some relief to individual income tax payers in the forthcoming Budget by raising the exemption limit to Rs 2 lakh, as provided in the Direct Taxes Code (DTC), and hiking the slabs for different tax brackets.

India’s personal income tax rate is among the highest in the world. The Budget 2018 should be centered around job creation, lowering personal income tax slabs, and tax savings schemes /deductibles. Such changes would directly benefit the normal taxpayer.

The possibility of lowering the tax rates, however, is remote in view of the fiscal constraints being faced by the government, sources said, adding that the government will take on board some of the key recommendations of the DTC.

DTC, which is currently being scrutinised by the Parliamentary Standing Committee, has suggested that the income tax exemption limit be hiked to Rs 2 lakh from Rs 1.8 lakh at present.

In the last budget, the Government had restricted set off of loss arising from house property against any other head to INR 2 lakh per annum. The said restriction has adversely impacted the lives of common man.

Now, builders are looking forward to the Budget to come up with announcements which can provide an impetus to the otherwise sluggish sector.

It also proposes that the highest personal income tax rate of 30 per cent should apply to annual income above Rs 10 lakh, as against Rs 8 lakh.

Finance Minister Pranab Mukherjee will be unveiling the Budget proposals for 2012-13 sometime around mid-Marc.

The industry too is demanding that in view of high inflation, the income tax slab should be increased although the government may retain the existing tax rates.

CII Director General Chandrajit Banerjee suggested that basic exemption limit should be increased from Rs 1.8 lakh to Rs 2.5 lakh for individuals.

"We have suggested that the income in the range of Rs 2.5 lakh to Rs 6 lakh should be taxed at the rate of 10 per cent, whereas that in the next slab up to Rs 10 lakh can be taxed at the rate of 20 per cent. Above Rs 10 lakh, it should be taxed at 30 per cent," Banerjee said.

The upcoming budget’s biggest challenge will be on the taxation side of both direct and indirect taxes. GST has consumed many indirect taxes and any decisions taken will have to come from the GST council, the changes brought to the direct taxes, primarily personal income tax laws, remains to be seen.

 With so many changes introduced and implemented by the present government, the biggest population got affected is the average taxpayer. So, measures need to be taken in the Budget 2018 that satisfy the needs and expectations of this group.

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