Reuters blog archive
from India Insight:
Arun Jaitley's first budget as India's finance minister should allow individual taxpayers to invest more money in vehicles such as government savings bonds, mutual funds and employee savings plans, and provide them with tax credits that would bolster their savings and boost economic growth, tax experts say.
Income tax rules allow for an annual exemption of 100,000 rupees ($1,700) in investments and expenditures such as life insurance and home loan repayments, a rule that has remained unchanged for about a decade. Such investments, along with public provident funds, employee provident funds, five-year term deposits in banks and equity-linked mutual fund savings plans are good for individuals and also help keep the economy on a strong footing, said Suresh Surana, founder, RSM Astute Consulting.
“Savings need to be channelized into economically productive avenues which are what Section 80C essentially provides for, investment either in government securities or bank deposits or life insurance,” said Surana.
These comments come as the Bharatiya Janata Party, which won parliamentary elections and installed Narendra Modi as prime minister in May, releases its first annual budget for the country on July 10.