gopalakrishna

With an eye on election and last full budget in the office, finance minister P Chidambaram is expected to cheer all around with Budget 2008-2009.

It is expected to raise the exemption limit for income tax and increase in the amount of savings one can make to qualify for tax breaks. The coming budget is also look into providing options of wider range of tax-free instruments for investments and a reorder in tax slabs.

The finance ministry, which is giving final touches to the tax proposals, is likely to raise the income-tax exemption limit from Rs. 1,10,000 to Rs. 1,25,000. An increase of Rs. 15,000 in the exemption limit will give every taxpayer a relief of Rs. 1,500 .

Corporate taxpayers can also expect some relief in the form of removal of surcharge.

Political decisions are strongly going to shape the final structure of the budget 2008-2009. The 2009 Budget will be a vote on account as a new government has to be put in office in May 2009.

A hike in the current investment exemption limit of Rs. 1,00,000 to Rs. 1,50,000 is also being looked at, with a view to channelise some savings into the core sector. Investments in special infrastructure bonds and dedicated infrastructure funds could become eligible for tax exemption.

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