Wednesday 25 January 2017

Budget ideas for Finance Ministry

Budget ideas for Finance Ministry

Union Budget 2017 - As North Block begun work on the Finance Bill 2017, ET Wealth reached out to experts from the financial services industry to know what they want to see in the coming Budget. 

Introducing a Retirement Demat Account (RDA) can provide flexibility. This is where different dematerialised investment instruments, such as stocks and mutual funds, can be placed. The investor can switch his money from one investment to the other without tax consequence.

Stocks and funds: Plug loopholes for better tax compliance
There is no tax on long-term capital gains from listed securities. People take advantage of this through structures in small-cap shares. 

Taxation: Hike overall deduction limit to Rs 3.5 lakh
One expectation is an increase in the investment limits to Rs 3.5 lakh under Section 80C, 80CCC and 80CCD(1B), which is currently at '2 lakh. The tax deduction limit should be made fungible and applicable to all products held in a tax shield account.

Extend the LTA benefit to international trips
At present, tax relief for leave travel assistance (LTA) is restricted to two journeys performed in a block of four calendar years. The relief is restricted to economy class airfare or first class rail fare, for traveling with family within India. Therefore, it would be good to extend the LTA benefit to international journeys and in addition to airfare, make other expenses such as boarding and lodging eligible for exemption.(Read More)

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