NEW DELHI: The government is unlikely to offer any major relief on personal income taxes in the 2016-17 budget due to lack of fiscal space, senior officials have said.Discussions on the crucial budget, which will be unveiled in February, are under way and the numbers are being worked on. But a tight fiscal situation may prevent the government from being populist at any level. “The room on the fiscal front is very limited. Therefore, it is unlikely that there will be any major concessions on the personal income tax side,” a government official, who did not wish to be identified, told TOI, adding that some relief may be in store for taxpayers. But he did not elaborate.The government is faced with a very challenging fiscal situation in the current financial year as well as in 2016-17. Several factors have narrowed the fiscal space. The first is the impact from the rollout of the 7th Pay Commission recommendations. In November, the Pay panel had recommended an increase in pay and allowances of 23.6%, a 24% rise in pensions and onerank-one-pension for central government employees and paramilitary personnel.These changes are estimated to cost over Rs 1lakh crore to the government in 2016-17,according to finance ministry estimates. The government is examining the proposals and they are likely to be implemented soon. While low global crude oil prices have provided much needed breathing space, the possibility of an increase in prices next year will prompt the government to be cautious.The economy, which has shown signs of a rebound, needs support through public investment as private investments have not yet picked up to the desired level. The midyear review of the economy, a half yearly report card on the state of the economy, has backed appropriate fiscal and monetary policies to boost public investment. The government has already signalled its strong commitment to stick to the fiscal deficit target and this is likely to make the budget a tight rope walk.In his 2015-16 budget, finance minister Arun Jaitley had extended a string of benefits to middle class taxpayers, including raising the limit of deduction on health insurance premium from Rs 15,000 to Rs 25,000 and for senior citizens the limit was hiked to Rs 30,000 from the existing Rs 20,000. Jaitley had promised to do more for individual taxpayers. “As and when my fiscal capacity improves, individual taxpayers will have a lot to look forward to,” he had said in his budget speech.The FM had unveiled the plan to reduce the rate of corporate tax from 30% to 25% over the next 4 years to boots investment, growth and jobs. He had also called for rationalization and removal of various kinds of tax exemptions and incentives for corporate taxpayers , which account for a large number of tax disputes.