Ahead of Budget 2020, CNBC-TV18’s special show ‘Budget Hotline’ gives its viewers an opportunity to put forth all their tax queries as well as share their expectations from the budget. Kuldip Kumar, Partner at PwC answers some of these queries.

Answering a query on whether a hike in tax rebate limit on housing loan is likely, he said, “The way the government is conducting meetings, discussing various aspects of the budget on what they can do to promote employment, revive growth, revive consumption, etc. I think housing sector could be one of that."

"Last year the government had done away the taxation of second self-occupied house. Prior to this, if you had second house and even if it was let out, you were to pay tax on a deemed basis. Now, they made that change you don't have to pay tax but the deduction for the interest still remains capped at Rs 2 lakh. So, if you are having 2 houses, 2 are self-occupied but the interest deduction remains capped at Rs 2 lakh. So, it is the right time probably for the government to raise the limit from Rs 2 lakh to probably Rs 3 lakh,” he said, adding that this would benefit the middle class, which would have more disposable income in their hands, which would ultimately boost consumption.

On educational allowance, he said, “For the last two decades the educational allowance which is exempt from tax is Rs 100 and for the hostel expenditure there is allowance is Rs 300 which is exempt from tax."

He further added, "However, under Section 80(C), for two school going children, the full time education, and the tuition fee is also eligible for deduction under Section 80(C). But the Section 80(C) deduction limit is just Rs 1,50,000 and there are so many items of investment and expenditure are covered, one really hardly gets any push. So, there is scope for government may enhance the 80(C) limit from Rs 1,50,000 to say Rs 2 lakh or Rs 2,50,000 or alternatively they can allow a separate deduction for school children fee."

According to him, the government may tinker with the income tax slabs and give more money through that route and do away with all these small exemptions.