Budget 2011: Pranab may dole out tax sops to salaried class, farmers
Finance Minister Pranab Mukherjee is likely to give tax concessions to the salaried class and offer incentives to farmers in his Budget 2011-12 on Monday to give relief from high prices and keeping an eye on elections in five states.
It is widely expected that the Budget will raise the income tax exemption limit to Rs 1.80 lakh from the current Rs 1.60 lakh per annum.
The Finance Ministry is already committed to raising the exemption limit to Rs 2 lakh per annum in the Direct Taxes Code (DTC) which is to be implemented from April 2012.
Mukherjee may also consider raising the limit for investment in tax-free infrastructure bonds to give a boost to the fund-starved sector. Investments up to Rs 20,000 in infrastructure bonds enjoy tax exemption now.
Experts said with fiscal deficit projected to come down sharply to 4.8 per cent, the Finance Minister would have some leeway to provide these tax concessions.
The Economic Survey 2010-11 presented in Parliament projected fiscal deficit at 4.8 per cent, down from the budget estimate of 5.5 per cent for the current fiscal.
With five states -- Assam, Tamil Nadu, Puducherry, Kerala and West Bengal-- heading for polls, it is unlikely that Mukherjee would completely roll back the stimulus and come out with harsh measures to increase government revenues and bring down fiscal deficit, experts said.
Mukherjee's third consecutive budget is also expected to increase the credit flow to the farm sector.
On tax rationalisation, Mukherjee had said, "The sustained growth has been possible due to rationalisation of
