By Parizad Sirwalla
The common man would be looking forward to the upcoming budget in the context of tax saving. Some of the expectations from the aam aadmi are as follows:
Changes in the taxable income slabs during the previous year: The basic income exemption limit for individuals of 60 years and below could be increased from Rs 2.50 lakh to Rs 3 lakh. The other income slabs maybe increased as follows: income from Rs 3 lakh to Rs 10 lakhs at the tax rate of 10 percent, while income from Rs 10 lakh to 20 lakh and from above Rs 20 lakh could taxed at the rates of 20 and 30 percent, respectively. These changes will help increase the disposable income available with the individual. The limits for senior citizens could also be increased accordingly.
Deduction under Section 80C: Last year’s budget increased the deduction in specified investments under Section 80C of the Income-tax Act 1961 (the Act), which included investments in Provident Fund, Public Provident Fund, National Savings Certificates, etc.The limit was increased from Rs 1 lakh per annum to Rs 1.50 lakh per annum. However, considering the potential boom in the economy and investment opportunities there is a case to increase the amount from Rs 1.50 lakh per annum to Rs 2 lakh per annum. The qualifying fixed deposit tenure can be reduced from five years to three years.
Exemptions: The Budget may also focus on increasing the exemptions for the salaried man on medical reimbursement(currently at Rs 15,000 per annum), conveyance allowance (Rs 9,600 per annum at present), children education allowance (presently at Rs 2,400 per annum), leave travel concession (currently limited to domestic travel), etc., some of which have not been increased for almost a decade. Considering these limits are quite archaic, they merit a hike in the exemption amounts.
Simple tax administration and faster tax refund processing: Facilitating quicker settlement of tax refunds is the need of the hour.India is heading towards overall development and public sentiment around the upcoming Budget seems to be significantly positive.The tax regime is an important aspect that would need to be looked into.
(The author is Partner- Personal Tax, KPMG in India. Views and opinions herein are those of the authors and do not necessarily represent the views and opinions of KPMG in India. All information provided is of a general nature and is not intended to address the circumstances of any particular individual or entity.)
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Updated Date: Feb 23, 2015 11:53:03 IST