Increase in the Basic Income Tax Exemption Limits for Individuals – To compensate partially for rising inflation it would be right move if govt. increases basic exemption limit from the current Rs. 180,000 to Rs. 3,00,000/-. The education cess of 3% is expected to be abolished. Similarly, the basic exemption limits for women and senior citizens may also be correspondingly increased.
Increase in deduction under Section 80C / 80CCF – Present limit for deduction under section 80C of the Income Tax Act (the Act) of Rs. 1,00,000 in respect of certain investments such as Provident fund, ELSS, life insurance premium, housing loan repayment and 5 year bank deposits may be increased to Rs. 2,00,000. Similarly to increase the investment participation in infrastructure the deduction under section 80CCF may be increased to Rs. 40,000 from the current limit of Rs. 20,000. Increase in both limit will significantly encourage capital investment which will help in growth of slowing economy.
Increase in deduction for Interest on Housing Loans – It is desirable to increase the existing deduction limit from Rs.1,50,000 to Rs.2,50,000 in respect of interest on capital borrowed for self-occupied property. This will not only boost slowing Housing industry but also provide some relief to the taxpayers who are already finding it difficult to buy an house property due to skyrocket increase in prices of Housing propriety.
Increase in limit of Medical Expenses- Reimbursement – The exemption limit of medical expenses reimbursement under section 17(2)(viii) was raised from Rs.10,000 to Rs.15,000 by Finance (No.) Act, 1998.Capital Gain index for the financial year 1998 was Rs. 150 and the same is 785 for financial year 2012. Showing and increase of more then 350%. In view of raising cost of medical expenses it will be appropriate if Government raises the limit to atleast Rs. 60,000/-.
Increase in Threshold limit for Wealth tax – Currently, Wealth Tax is levied at the rate of 1% on net wealth exceeding Rs. 30 Lacs. We expect it to be increased to Rs. 1 crore.