Budget to make sweeping reforms w.r.t direct taxation: SBI Research

In a report published by SBI Research, an arm of country's largest commercial bank State Bank of India titled 'Ecowrap', expects Income tax limit to be raised up to Rs 3 lakh with tax collection under Income Declaration Scheme (IDS) touching Rs 50,000 crore and cancelled liabilities from RBI to be around Rs 75,000 crore.

According to the report by SBI, the budget is expected to raise the income tax exemption limit from current Rs 2.5 lakh to Rs 3 lakh, thereby, indirectly giving more money into the hands of common people.

The report Ecowrap also suggests interest exemption on housing loans from 2 lakh to Rs 3 lakh and the lock-in period for bank deposits from 5 years to 3 years for availing tax exemptions.

As per SBI'S chief economist Soumya Kanti Ghosh, tax exemptions could be "more than balanced by (revenue generated from) Income Disclosure Scheme-2 and cancelled note liabilities of RBI".

The report pegs gross domestic product (GDP) growth rate of 7.1 per cent in 2016-17.