Assocham asked to raise the tax exemption limit for Individuals to 4 lakh and for senior citizens to 5 lakh
Industry body Assocham today asked the government to raise the tax exemption limit on personal income from Rs 1.6 lakh per annum to Rs 4 lakh per annum and for senior citizens up to Rs 5 lakh per annum. The industry body was giving its proposals on the draft direct taxes code which has been put in public domain by the government for comments.
The direct taxes code, which will replace the age-old Income Tax Act 1961, has proposed the tax exemption limit for common citizens at Rs 1.6 lakh while that for senior citizens at Rs 2.4 lakh per annum.
“With favourable consideration of this proposal, taxpayers in low and middle income group, who could end up paying more tax than now, on account of removal of various exemptions and deductions under DTC, can benefit from raise in threshold limit as tax savings on account of increase in it could offset impact of removal of exemptions and deductions,” Assocham President Swati Piramal said.
Meanwhile, the industry body has also urged the government to bring in standard deduction of 50 per cent of the salary or Rs 2,40,000, whichever is less to balance out additional tax burden, which employees would be facing due to removal of various exemption.