Every year people wish that budget will bring some good news for them but mostly they turn disappointed every year. If we talk about only salaried class they mostly look for taxes and the deduction limit in budget, which help them to save some amount of tax.
Budget date is nearby and I am herewith recommendation of salaried class people for this year’s budget:
1. Increase in 80 C Investment limit:-
Currently, an individual gets the deduction u/s 80C of the Income tax Act, 1961 (“the Act”) which is limited to Rs. 100,000 per annum for different investments/expenses incurred during a year(like contribution towards employee provident fund, Public Provident Fund, payment of life insurance premium, tuition fees, etc.). This limit is in force since past 5-6 years. With increase in inflation/ price and absence of comprehensive social security scheme in India government should relook in this limit. Salaried tax payers wish this limit to be raised to say Rs. 200,000 per annum.
2. Extra deduction for education expenses:-
Today two type of deductions are available related to education expenses. First is deduction on fees paid for the education of dependent children tuition fees in any university, college, school or any other educational institution. This deduction is under limit of 80 C. Second is deduction of interest on loans taken for higher education by family member.
As we know saving for education is not child’s play, cost of education has gone up like anything in past few years. With increase in child education expense salaried tax payer wish extra deduction of Rs 100,000 per annum towards education expenses.
3. Extra Deduction on Skill upgrade expenses:-
Businessman gets deduction in income for office running expense. No deduction is allowed to salaried individuals who pay tax on their gross salary.
In today’s times, to upgrade their skills / specialization employees incur expenses on journals, magazines, trainings, certification etc. All these expenses are in the nature of official expenses in the true sense to earn salary income and are not merely personal expenses. I propose such expense should be deducted from income at par.
4. Increase in Transportation Allowance Exemption:-
Current exemption in terms of Transport allowance is 800 Rs/- per month. Means your office is near or far you will get exemption of only 800 Rs/- per month as transport allowance. This allowance is granted by the employer to the employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.
This limit is applicable since 1998. Petrol price was 23 Rs/- in 1998 and now it is 72 Rs/-. Petrol price has gone up by 200% but limit is as it is. As transportation has gone up significantly exemption limit for salaried class should be raised to minimum of INR 3,000 per month.
5. Increase in Education Allowance Exemption:-
For education which is essential today salaried people has to pay tax. A salaried person has to think twice for giving good education to their children. Current education allowance exemption limit is INR 100 per month per child. Meaning yearly salaried people can spend 1200 Rs/- per child on education.
Looking at scenario today I feel this limit should be enhanced to minimum INR 3,500 per month to bring it in line with the rising inflation and cost of education.
6. Reimbursement of Medical Expenditure:-
As per current Income Tax rules any sum reimbursed by the employer in respect of any expenditure incurred by the employee on the medical treatment of self/ family is currently nontaxable up to INR 15,000 per annum.
Looking at current medical expense and future need the salaried Individuals expect from the government that the current limit of INR 15,000 per annum should be increased to at least INR 30,000 per annum.
7. Deduction in respect of interest on time deposits:-
As per current act interest from savings bank account with banks/ post office is deductible from taxable income to the extent of INR 10,000 per annum. To encourage long term savings by middle class, this limit is expected to be extended to income by way of interest on time deposits (made for a fixed period of not less than three years) and the limit should be set at least INR 25,000.
8. Deduction for interest on housing loan:-
As per current Income tax law maximum limit of INR 150,000 is available from taxable income towards interest on loan taken for acquisition/construction of self‐occupied house property.
Every now and then we see rise in interest and property rate looking at current circumstances this deduction limit should be increased to at least INR 300,000 per annum.
At last I just want to say at time of election when politicians requires vote they listen to every demand of people. But when time comes for budget they simply refuse our demand by giving multiple excuse like fiscal deficit, economy etc. Hope as it is last budget of current government not full but at least some demand mentioned above shall be incorporated in budget.
If you are agree on suggestion given above just provide your agreement by passing this post to everyone.