Come Budget-time, and the media is rife with rumours about which taxes will be raised or lowered, and the direction in which the government might make fresh public investment.

This year is no different – although the corporate sector seems to be a little more relaxed than it has usually been in the past on Budget eve.

It's not only the various industry lobbies that push their demands on the government through the media. The government too does some kite flying, to see how the public (or sections of industry) might react to plans on the anvil.

Sometimes very few of the rumours turn out to be true. They end up as nothing but wishful thinking, or statements of a utopian dream.

But which of the rumours will turn out to be true and which will be falsified this time?

We'll never know, will we, until Budget day?

We thought it might be an interesting exercise to list the various rumours and speculations on government plans, along with industry demands floating around, and then see how they actually fare on budget day. Catch the score on 29 February 2008!

Watch this space for the Direct and Corporate Tax expectations, and we'll keep adding to it as and when new ideas are floated. Those doing the rounds till now, are listed below:

• The standard deduction limit for individual tax payers may be raised 20 per cent to Rs120,000. This will make for a saving of up to Rs2,000 in taxes every year.
• Personal income tax exemption limit could be raised to Rs1.25 lakh per annum, from Rs1.1 lakh. Taxable income of up to Rs1.5 lakh will most likely continue to attract a tax of 10 per cent.
• Surcharge on corporate tax may be abolished, which will see a fall in the corporate tax rate. Currently, the corporate tax rate stands at 33.9 per cent, including surcharge and cess. The government is also expected to reduce the number of exemptions to help companies reduce their tax burden.
• Corporations may have to pay a tax on capital income that arises from money forfeited as part-payment for their shares.
• The 10 per cent surcharge on personal and corporate income tax may be slashed by 50 per cent, or even scrapped. This will bring down the burden of a certain category of individuals, firms and companies to somewhere between 1.54 per cent and 3.09 per cent.
• Service tax rate will most likely to be unchanged at 12 per cent.
• The Goods and Services Tax (GST) rate and structure is likely to be announced. The Central Sales Tax (CST) rate may be reduced by a percentage point to 2 per cent. It is expected to be withdrawn by 2010-2011, once the GST is implemented.
• Value-added tax for LPG and other declared goods, edible oils, bread, ready-made garments and intermediate goods may be raised to 5 per cent from the current 4 per cent. This is with a view to offset revenue losses that the states would incur due to the lower CST.
• The government may extend tax exemption for companies setting up large power projects by seven years to 2017.
• Oil firms engaged in exploration and production work may get an exemption from the 12 per cent service tax.
• Taxi, bus fleet owners and contractors providing raw materials, electrical work and furniture in civil constructions are likely to come under the presumptive income tax net.
• The Tirupur Exporters Association in has sought an increase on depreciation of plant and machinery, to the tune of 25 per cent. The association also wants service tax and fringe benefit tax on sales promotion expenses to be removed.
• The government is likely to extend the 10-year tax exemption under the Software Technology Parks of India (STPI) scheme. The scheme is scheduled to end in March 2009.