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 ASSOCHAMsurvey 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.
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
In order to give boost to the tourism sector, the Budget for 2015-16 is likely to expand the scope of LTA and LTC by including hotel and other expenses besides travel for the purpose of tax benefit.
The Ministry, sources said, it is also considering a proposal to allow employees to availLeave Travel Concession (LTC)/ Leave Travel Allowance (LTA) every year as against the current practice of two times in a block of four years.
At present, LTA or LTC covers only economy class air travel or first class (AC I Class) rail fare. An announcement in this regard is likely to be made in the Budget to be presented by Finance Minister Arun Jaitley on February 28.
Prime Minister Narendra Modi had earlier expressed his keenness to promote tourism. Experts are of the view that encouragement to the tourism sector will promote development of different regions and create employment opportunities.
"To boost domestic tourism and also provide some tax relief to the individuals, the Leave Travel Concession benefit should be increased to one visit for every financial year," KPMG (India) Partner Vikas Vasal said.
He further suggested that tax concessions should also be made available for stay in hotel may also be covered to help families avail of a holistic benefit.
The LTC/LTA is available to the individual and his family including spouse, two children, parents, brothers and sisters, who are wholly dependent on the assessee.
"There is a huge scope for developing the tourism industry in India which provides direct and indirect employment to millions of people. Therefore, an enhanced tax relief to individuals on LTC will benefit the overall economy," Vasal said.
The Ministry, sources said, it is also considering a proposal to allow employees to availLeave Travel Concession (LTC)/ Leave Travel Allowance (LTA) every year as against the current practice of two times in a block of four years.
At present, LTA or LTC covers only economy class air travel or first class (AC I Class) rail fare. An announcement in this regard is likely to be made in the Budget to be presented by Finance Minister Arun Jaitley on February 28.
Prime Minister Narendra Modi had earlier expressed his keenness to promote tourism. Experts are of the view that encouragement to the tourism sector will promote development of different regions and create employment opportunities.
"To boost domestic tourism and also provide some tax relief to the individuals, the Leave Travel Concession benefit should be increased to one visit for every financial year," KPMG (India) Partner Vikas Vasal said.
He further suggested that tax concessions should also be made available for stay in hotel may also be covered to help families avail of a holistic benefit.
The LTC/LTA is available to the individual and his family including spouse, two children, parents, brothers and sisters, who are wholly dependent on the assessee.
"There is a huge scope for developing the tourism industry in India which provides direct and indirect employment to millions of people. Therefore, an enhanced tax relief to individuals on LTC will benefit the overall economy," Vasal said.
Source:-The Economic Times
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