Hike in personal income tax exemption
limit to Rs 3 lakh, deduction for housing loans up to 5 lakh and upward
revision in the allowance for medical reimbursement are among the main
expectations of salaried individuals from the Union Budget 2015, the
first full-fledged budget from the Narendra Modi government, according
to an ASSOCHAM survey released on Thursday.
An overwhelming 92 per cent of the
salaried individuals, both men and women, said the government needs to
increase the tax bracket from the current Rs 2.50 lakh to at least Rs 3
lakh so that more money is left in the hand of the common man/woman.
While the wholesale price index inflation has gone into negative, there
are still a host of items of common household use, like fruits, pulses
and vegetables, which have witnessed an annual inflation between 8 and
12 per cent per cent during January 2014 and January 2015.
"Thus, the high prices of these items
are still a cause of concern for the common people and the Budget must
address the issue," ASSOCHAM Secretary General D S Rawat said, while
releasing the survey.
The salaried income people also want
that the tax exemption limit for women should be raised to at least Rs 4
lakh p.a. Besides, the limit for exemption on saving instruments like
fixed deposits, national saving certificates and public provident funds
should also be raised to Rs 2.50 lakh so that savings at the household
level get a boost.
The survey was conducted in major places
such as Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabd, Pune,
Chandigarh, and Dehradun, among others. About 500 salaried class
employees from the different sectors were covered by the survey from
each city on an average.
"The Finance Minister should increase
the 80C deduction limit to Rs 2.50 lakh. With the advent of new
investment schemes such as Sukanya Samriddhi Yojana and equity-oriented
pension funds, the limit seems very condensed and needs to be inflated
to Rs 2.50 lakh in Budget 2015-16. The government may consider
increasing the exemption limit to even higher to Rs 3 lakh to promote
investments and encourage saving among taxpayers," highlighted the
majority of respondents. On top of it, a separate deduction should be
allowed for the premium paid for the insurance policies to encourage
insurance which has a very low penetration at present.
Gold imports are declining and hence the
government may reduce import duty by around 2 to 4 percent. At present
the import duty is 10 percent and reducing it to around 4 to 5 percent
should make prospective buyers happy, said nearly 88% of the
respondents.
At present, the limit of deduction of
interest on housing loan is Rs 1.50 lakh per annum. This should be
increased to Rs 5 lakh to boost the housing sector as also give relief
to the middle class families, added 78% of the respondents.
To encourage investments in
infrastructure during the 12th plan period, the deduction under 801A (4)
"profit-linked incentives in the form of 100% deduction of income in
SEZ development" must be continued, said Rawat.
Nearly 82% of the salaried class said
that it is necessary to have a separate deduction of Rs 50,000 for the
payment towards annuity or pension plans. Deduction of the amount paid
towards annuity plans u/s 80CCC and NPS u/s 80CCD also comes under the
threshold limit of section 80C. Section 80C is already is flooded with
various savings and investment schemes and with the new kind of
equity-oriented pension plans, it becomes utmost necessary to have a
separate deduction of Rs 50,000 for the payment towards annuity or
pension plans.
Source : The Economic Times
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