It's never too easy to predict what may happen and may not happen in the Union Budget. Most newspapers and magazines tend to quote sources, while others speculate on what policy decisions could happen in the Union Budget 2015-16.
1) Tax Saving Duration on Bank Fixed Deposits Maybe Reduced
It is being speculated that the tenure on bank tax savings fixed deposits maybe reduced to three years. This is to bring it in line with tax savings schemes like ELS, which have a lock-in of three years. At the moment bank fixed deposits have a lock-in of 5 years and is still lower than that of public provident fund, NSC etc.
2) Dividend Distribution Tax Maybe Scrapped
Reuters reported that the Dividend Distribution Tax maybe completely scrapped in the Union Budget 2015-16. Each time dividend is paid, Indian companies pay the tax on the dividend. Earlier, individuals bore these tax on dividends. It remains to be seen whether this move would be implemented. It could give a huge boost to the stock markets, if that happens.
3) Import Duty on Gold Maybe Cut
There are strong roumours that import duty on gold could be cut. This is largely in line with the fact that the current account deficit, which had reached alarming levels a couple of years ago is now under control. The government had raised import duties on gold to curb its imports and help prevent a fall in the rupee due to the current account deficit.
4) Sec 80C Limits Maybe Hiked Again
There are reports that the Sec 80C limit for tax savings schemes maybe hiked once again. It is currently Rs 1.5 lakh and the Union Budget 2014-15 hiked the limit to Rs 1.5 lakh. What the limit would be and whether it would be hiked is speculation altogether.
5) Home Loan Interest Rate Hike
The Hindustan Times reported that the government may raise the tax exemption limit on home loan interest by Rs. 50,000 this year. It is presently Rs.2 lakh and the sum maybe increased to Rs.2.5 lakh.