Finance minister Arun Jaitley in last year's Budget expressed the government's commitment to progressively lower taxes and bring in better tax administration in line with the government's theme of bringing in 'acche din'.

However, despite fall in global oil prices, one sees an increase in cost of living as well as food prices. This situation could worsen in the coming months due to the financial impact of the 7th Pay Commission recommendations as well as the countrywide below-par monsoon.

In this backdrop, the finance minister is unlikely to grant any significant income-tax concessions. Yet, seeking additional taxes from the salaried class could be counterproductive and also have severe political ramifications. Hence, it is likely that the FM will play it safe by continuing to rationalise the personal tax regime and at the same time targeting black money.

To begin with, consistent with the government's intention of keeping the tax base broad, the basic exemption is likely to be retained at Rs 2,50,000. Similarly, the existing surcharge of 12% on income over Rs 1 crore is likely to continue given that wealth tax has been abolished.

On the other hand, with a view to encourage savings, the income-tax deduction of Rs 150,000 for specified investments under Section 80C could be increased to Rs 200,000 and also expanded to cover investments that promote the government's pro-business initiatives including the 'Make in India', 'Digital India' and 'Start up India' movements. Similarly, with a view to encourage participation in NPS, some concessions in tax at withdrawal stage cannot be ruled out.

As a part of the tax rationalisation, it is possible that the standard deduction from salary income in force till financial year 2004-05 is re-introduced with new limits. Further, with significant increase in costs, the archaic limit on medical expenditure of Rs 15,000 could be increased to Rs 40,000. Similarly, limits on children education allowance and hostel expenditure allowance and meals could be overhauled.

The deduction for interest on housing loan of a maximum of Rs 2,00,000 for one self-occupied house property could be increased to Rs 3,00,000. Further, to avail the deduction, the requirement of completion of house acquisition or construction within three years of taking the loan could be done away with or relaxed further which will also boost the real estate sector which is experiencing a slump.

With the recently concluded Black Money amnesty scheme being only moderately successful, do not be surprised if further (and unintentionally harsh) procedural measures are introduced to identify 'unaccounted' wealth and boost tax collections.

On the tax administration side, the tax returns forms, tax return filing and validation process and grant of tax refunds are likely to be further simplified.

Finally on the indirect tax side, while the government continues to push for the introduction of the GST law, this Budget could see some changes, especially in the excise laws as a precursor to the introduction of GST, which should ideally impact the prices positively.

To sum up, due to the tight fiscal situation, it is unlikely that Mr Jaitley would act as the Good Samaritan for the 'aam aadmi' and let's wait and watch what unfolds on 29 February 2016.

(Views expressed are personal)

The writer is a tax partner, EY India