Like every year this year too there were lot many expectations with the budget. Being elections nearby, many were expecting major relaxations with regard to taxations. Many were expecting higher income tax slab rates along with increase deductions and exemption limits under various sections.
No such announcements were made except the slab rates under the new tax regime. Government has earlier introduced a new tax regime wherein deductions are not available and Assessee has the option to pay tax at lesser rates. Though the old regime is still there but it seems that Government is moving towards a regime where they want that people should not take the deductions of LIC, Mediclaim, Housing Loan, etc and should focus on simplified manner of paying taxes without taking any such deductions.
Though it seems that the concentration is more on the simplification and transparency from both sides by motivating Assessee to adopt the new regime. However, we should not forget that the purpose of these deductions was savings which is also the culture of our country. Further introduction of taxation on LIC proceeds along with taxation of Market Linked debentures at higher rates proves that Government don’t want promote savings but wants that earn more and sped more and pay (taxes) more.
