In the forthcoming session of the parliament the re-elected UPA government will present the budget. The tax exemption limit will be increased upto Rs 1.75-Rs 2 lakh from the current Rs 1.50 lakh, which is a great news for Indian middle class. The other benefit in the direct tax segments could be withdrawal of the Fringe Benefit Tax.

Raising of the tax exemption limit along with the withdrawal of FBT will act as another stimulus since the large middle class population will be left with more money in hand, especially at a time when the government is likely to release the remaining 60% salary arrears of the 6th Pay Commission. The removal of FBT has also been mooted by the commerce ministry. It had also sought continuation of interest rate subsidy while seeking to further raise it from the existing 2% to 4%.