By Kuldip Kumar
With the Budget round the corner, it is usual for expectations getting built up in the mind of tax payers for some relief. There are two expectations which if met in the coming year’s Budget can really cheer the salaried class and senior citizen taxpayers category.
For salaried class tax payers, most of them get Leave travel assistance ( LTA) as part of their salary package for their annual leave. But the tax laws allow exemption only for two trips along with the family in a block of four calendar years and amount of exemption is also restricted to the economy class air fare etc. to any destination within India. This may be rationalized by allowing this exemption every year on financial year basis. Other expenses such as boarding and lodging too may be allowed to be covered and the foreign destinations should also be permitted to be eligible to avail exemption.
Increase in the cost of medical services have been hurting the most to the senior citizens particularly with the growing age they need to spend more on their day to day medical needs such as frequent routine medical checks ups (not requiring hospitalization), physiotherapy or dental treatment etc.
Although there is a higher limit of deduction for senior citizens for medical insurance but for the day to day medical needs there is no deduction. A deduction of Rs 50,000 may be introduced to provide ease to such tax payers in relation to their medical expenditure.
Increased cost of living and stagnation or declining returns from fixed income instruments is another area of pain for the senior citizens. Currently, a deduction of Rs 10,000 is available but that is limited to interest on saving bank accounts. This limit may be increased to Rs 75,000 for the senior citizens and the interest from fixed deposits or other fixed income instruments may also be made eligible for deduction.
Those who are of 80 years and above (very senior citizens) are eligible to avail higher basic exemption of Rs 5 lakhs. The age limit for this category of “very senior citizens” too should be reduced to 70 years keeping in view the current life expectancy data.
The author is a partner and leader, personal tax at PwC India, and his views are personal.