Union Budget 2019-20: Industry chamber CII for doubling I-T exemption to Rs 5 lakh, hiking 80C deduction limit

New Delhi: Industry chamber CII has urged the government to double the income tax exemption threshold to Rs 5 lakh and increase the deduction limit under Section 80C to Rs 2.50 lakh to incentivise savings in the Union Budget to be presented on 1 February. In its pre-Budget recommendations to the finance ministry, the CII also suggested lowering the highest personal income tax slab to 25 percent from 30 percent at present and allow exemption for medical expenses and transport allowance. Currently, income up to Rs 2.5 lakh is exempt from personal income tax. Income between Rs 2.5-5 lakh attracts 5 percent tax, while that between Rs 5-10 lakh is levied with 20 percent tax. Income above Rs 10 lakh is taxed at 30 percent. [caption id=“attachment_4347785” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] The industry body has recommended that income below Rs 5 lakh should be exempt while between Rs 5-10 lakh should be taxed at a lower rate of 10 percent. For those having income between Rs 10-20 lakh, the tax rate should be 20 percent, and those earn over Rs 20 lakh should be taxed at 25 percent. In view of the forthcoming general elections, Finance Minister Arun Jaitley will present in Parliament an interim Budget for 2019-20 on 1 February. The new government will come out with the final budget for the fiscal. The CII also suggested that corporate tax rate should be reduced to 25 percent, irrespective of turnover, and should be brought down to 18 percent in a phased manner. It also recommended that the limit for claiming deduction under Section 80C of I-T Act be raised from Rs 1.50 lakh to Rs 2.50 lakh to provide saving opportunities to public at large. “The exemptions for reimbursement of medical expenses and transport allowance may be reinstated along with the standard deduction of Rs 40,000,” the CII said. It also suggested that long term capital loss should be allowed to be set off with short term capital gain. The CII further recommended that employer’s contribution to superannuation fund under Section 17 of I-T Act should be removed to avoid double taxation, in line with the taxability of contribution by employer to Provident Funds.     To keep watching India’s No. 1 English Business News Channel – CNBC-TV18, call your Cable or DTH Operator and ask for the Colors Family Pack (inclusive of 24 channels), available for Rs. 35/- per month, or subscribe to the channel for Rs. 4/- per day.  To keep watching the Leader in Global Market & Business News – CNBC-TV18 Prime HD, call your Cable or DTH Operator and ask for the Colors Family HD Pack (inclusive of 25 channels), available for Rs. 50/- per month, or subscribe to the channel for Rs. 1/- per day.