After the historic announcement of demonetisation on November 8, 2016 the, common man is now awaiting acche din and is looking forward to the Finance Minister (FM) presenting the Union Budget 2017 with a heightened expectation of rebates, benefits and sops in the form of tax breaks. Expectations of benefits being doled out in the Budget are very high, way higher than those in 2014. Let's look at some areas which the FM may tweak.

The tax rates/slabs were last changed in the financial year 2014-15. The FM may enhance the same this year. Some changes in tax rates and slabs for an individual taxpayer below the age of 60 years may be as under:

The existing exemption limit of Rs 300,000 for senior citizens (60 years to less than 80 years) and Rs 500,000 for super senior citizens (80 years and above) could be enhanced to Rs 400,000 and Rs 650,000 respectively.

Salaried employees enjoy exemption from tax on certain allowances/benefits that the employer provides. However, these limits were fixed a long time ago and are somewhat archaic given that they not been revised keeping in mind inflationary rises. It is likely that the FM will tweak these limits (as set out below). A welcome change would be linking the limits with the cost of inflation for maximum perception of benefits:

Another view keeping in view a simple and straight forward tax structure could be to do away with the various exemptions provided and reintroduce the standard deduction. The deduction could be fixed at Rs 50,000 to Rs 100,000 depending on the salary earned.

In order to achieve the objective of 'housing for all' and the new incentives announced by the Prime Minister on the eve of the New Year, it is expected that there could be an increase in the deduction available for housing loan from the existing Rs 200,000 on self- occupied house property to Rs 500,000. The FM also could extend the benefit of the additional interest deduction of Rs 50,000 for loans sanctioned for residential house property under Section 80EE from March 2017 to March 2018.

Additionally, the FM may revisit the eligibility of availing deduction of pre-construction interest and allow the deduction in the year of incurrence rather than over a period of 5 years from the completion of the house property.

The FM may increase the limit of deduction under Section 80C of the Income-tax Act, 1961 from Rs 150,000 to Rs 300,000. This will give an impetus to household savings and divert it into growth avenues such as insurance, equity, retirement funds, etc. The aim is to really boost the India growth story and this is an important measure towards achieving our targets

The government has in the past budget provided several incentives for taxpayers to invest in the National Pension System (NPS). The FM may continue the same push for NPS by increasing the deduction under Section 80CCD (1B) to Rs 100,000 from the existing Rs 50,000. Further, it is also expected that NPS will be brought at par with the Employees Provident Fund or Public Provident Fund with respect to exemption of 100% of the accumulated balance on withdrawal, subject to certain conditions (EEE regime). Currently, NPS is subject to income tax under the EET regime and withdrawals are taxed to the extent of 60 per cent (a change made in the last budget)

The government has reiterated the importance of the infrastructure industry several times in the last year and to make good their ambitious target it is likely that the government may reintroduce the deduction of Rs 20,000 or actual amount invested, whichever is lower for investments made in infrastructure bonds. This will boost spending in this sector and make their plans really count.

Taxpayers save for their children's future education and other needs and sometimes in the name of the child. The income is clubbed with the parent's income and a nominal amount of Rs 1,500 is exempt. It is likely that the FM may revise the exemption limit to Rs 10,000.

Expectations are huge but the Finance Minister has a tough challenge ahead - maintaining the fiscal health of the economy and also managing the expectations of the people of the country. We are all waiting for February 1 with a flurry of hopes and our fingers crossed.