Government should hike tax exemption limit
Last Updated: Wednesday, June 18, 2014, 18:13
After being sworn in as the country's new Prime Minister and forming his cabinet, the time has come to see if the famous connotation with reference to Narendra Modi- “achhe din aane wale hai” holds true or not.
With the budget around the corner, all eyes are on Arun Jaitley, as the common-man expects him to unveil measures to curb inflation, create jobs, speed up infrastructure projects and create an environment that will attract Foreign Direct Investment (FDI) in the country.
The middle class, which helped BJP attain its Mission 272+ in the just concluded general elections, should be rewarded by the government.
With the common man's pocket shrinking day by day, the budget might just bring some cheer for all the taxpayers as there is a possibility of a slight reduction in direct taxes in the upcoming budget as Mr Jaitley is likely to increase the slab of Income Tax Exemption from the current Rs 2 lakhs to Rs 3 lakhs as well as give an additional exemption of Rs 50,000 for women and senior citizens.
UPA II was planning to give relief to individual tax payers, by implementing the Direct Tax Code (DTC), but it is not clear whether the new government will do the same. It is also expected that a 20 percent tax on annual income of Rs 10-20 lakhs against the current provision of Rs 5-10 lakh may be accommodated in the budget document.
Similarly, people may also expect that the limit for exemption for medical reimbursements be raised from the existing Rs 15,000 per year to a minimum of Rs 50,000 per year.
The transportation allowance granted to an employee by his employer for commuting between the place of work and his residence is tax-free to the extent of Rs 800 per month. This limit was set more than a decade ago, and needs to be revised upwards to at least Rs 3,000 per month, considering the ever rising commuting costs.
With the current level of interest rates on home loan, it is very difficult for any common man to buy a home. It is high time that the finance ministry strikes a chord with the people by slashing the home loan interest rates.
Besides all this, a major relief that a common man is expecting as of now is in terms of inflation. The nation's economy is being crippled by sky rocketing prices, particularly of food items. It will be interesting to see how Modi government helps the country to cope up on that front.
The Union Budget 2014-15 presentation will be closely watched by everyone, as the new government has to strike a balance between growth and inflation. While keeping the inflation in control it is also expected to bring in policy measures that will boost the economic growth.
First Published: Friday, June 13, 2014, 16:22