NEW DELHI: Good news for the middle class! –the tax exemption on the investments in long- tem savings instruments will increase from 1.5 to 2 lakh. But on the other hand this exemption limit can result in annual revenue loss of around 30,000 crore reports TNN.

Higher incentives for long-term instruments such as pension plans and life insurance schemes have been asked by several regulators, like Reserve Bank of India, SEBI and IRDA. The proposal will be looked upon by the new finance minister. Meanwhile RBI is looking towards keeping tax treatment same for various instruments, especially fixed deposits which have lost sheen in recent years as some mutual fund debt schemes get preference in tax treatment.

An economic recovery in the months ahead is expected to reduce the indentation for the exchequer and also free up more money for households to invest in financial instruments as well as real estate to help script a turnaround.

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