CA Sandeep Kanoi
Union Finance Minister Arun Jaitley is expected to present his budget either in last week of June 2014 or in First week of July 2014. With Budget around the corner the Taxpayers are very enthused about expected tax reliefs from Mr. Arun Jaitley and started thinking that good days are around the corner and some are even shouting the BJP slogan.”Aache Din Anne Wale Hai“.
Tax Payers are optimistic because of Mr. Jaitley’s open advocacy of Increase in Income Tax Exemption Limit from time to time.
In his interview with PTI on 04.04.2014 Mr. Jaitley advocated hike in income tax exemption limit, enhancement of excise limit for small industrial units up to Rs 5 crore and immediate implementation of the Goods and Service Tax (GST). Mr Jaitely further said that The current income tax exemption for income of Rs 2 lakh should be gradually but significantly raised.
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Further on 21.04.2014 Mr. Arun Jaitley demanded hike in the Income Tax exemption limit from Rs two lakh to Rs five lakh. Mr Jaitley said that,”Direct Tax should be reduced. If the Income Tax limit is raised from Rs 2 lakhs to Rs 5 lakhs, 3 crore people will save Rs 24 crore which will lead to a small impact of 1 to 1.5 per cent of National Tax Fund.”
Now the question is will Mr. Arun Jaitley be able to implement the above mentioned demands after coming to power.
Some of the Middle class expectation from the Coming Union Budget of Mr. Arun Jaitley are as follows:-
- Basic Exemption Limit: – Increase in Income Tax Exemption Limit to atleast 3 Lakh to meet the increased cost of living.
- Medical Reimbursement – Limit for exemption for Medical reimbursement perquisites should be increased to Rs. 50000/- from existing Rs. 15000/- to meet the increased cost of Medical services.
- Transport Allowance – The transportation allowance granted by the employer to his employee for commuting between the place of work and residence is tax-free to the extent of Rs 800 per month. This limit was fixed more than a decade ago, and needs to be revised upwards to at least Rs 3,000 per month, given the rising commuting costs.
- Section 80C Limit – Section 80C was again reintroduced in place of section 88 w.e.f. 1-4-2006. Limit of One Lakh of Investment under section 80C was fixed in A.Y. 2006-07 and even after 8 Years the limit is same despite multifold hike in prices. The Limit needs to be increased atleast to Rs. 3 Lakh.
- Increase in Home Loan Interest Limit – Home loan Interest exemption limit for self-occupied house was fixed at Rs. 1,50,000/- wef A.Y. 2002-03 and even after 12 Years the limit is same. The Limit should be raised to at least 5 Lakh considering the 6-7 time raise in prices of property across the country.
- Faster process of Income Tax Refund – Income Tax Refund needs to be processed faster and taxpayers should not be penalized for deficit in revenue target by withholding the refunds and further there should be a mechanism which can insure that taxpayers should not be penalized for mistakes of tax deductor.
In addition to above people wants an end to retrospective amendments, Tax terrorism and wants a simple taxpayer friendly tax regime.