The most consistent tax payers in India are the salaried class as their salaries are subject to TDS. Last year’s budget gave only a marginal relief to the salaried class with just a Rs.10,000 hike in the limit for taxable income. Since last year the salaried are pushing for a significant jump in the taxable salary and in the band for different tax rates. The wish is to increase the minimum taxable slab to Rs.2.50 L (for men). The next slab can be at Rs.10 L for 20% tax rate and 30% for income greater then 25 L.
The Finance Minister has advanced the presentation of the Budget by a few days (26th February) as the traditional day (28th February) is sandwiched by holidays. Such proactive measures are heartening. In the same vein the citizens of the country are also hoping to be paid heed to during this budget session.
Salaried Class’s Requests
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Taxable Income Slabs
The most consistent tax payers in India are the salaried class as their salaries are subject to TDS. Last year’s budget gave only a marginal relief to the salaried class with just a Rs.10,000 hike in the limit for taxable income. Since last year the salaried are pushing for a significant jump in the taxable salary and in the band for different tax rates. The wish is to increase the minimum taxable tax slab to Rs.2.50 lakhs (for men). The next slabs can be at Rs.10 lakhs for 20% tax rate and 30% for income greater then 25 lakhs.
Since the Fringe Benefit is now taxable in the hands of the salaried person, not raising the slabs significantly will increase the tax burden for salaried people.
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Tax Exempt Investments
The limit for tax exempt investments under Section 80C is continuing at the archaic Rs.1 lakh. This limit has to be increased to Rs.2.5 lakhs. This will help those who have the potential to invest. This will also help the housing industry as currently people are not able to derive the full benefits for the principal portion of the housing loan repayment.
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Increase in Gratuity Limit
Currently under discussion in some committees, the increase in the gratuity limit of Rs.3.5 lakhs has been a demand for a long time. Hope this gets done in the current budget. A limit of Rs.10 lakhs is more in tune with the times. An automatic increase in the limit based on inflation / capital gains index can be built into the gratuity limit.
Pensioners’ Request
The discrepancy between the age for the senior citizen between the IT department (65 years) and other Government departments (60 years) continues. If official retirement age is 60, people become pensioners when they turn 60, but that they should continue to pay high taxes till they turn 65 is an anomaly, if not unjust. Pensioners have now been asking some time, “If the Railways can give concessions from the age of 60, why not the Income Tax department tax less from age 60?”. Hope this budget will address this issue.
Students’ Request
The educational loan for students has become a double edged sword for banks. Many students do not pay-up properly and the Government periodically waives the loans given to students. This has made banks to approach this segment with a lot of caution & reluctance.
Genuine students who are in need of money and those who have been paying their loan dues properly get victimized in this process. Students’ request from this budget is to streamline this process. Benefits should go to those who have been paying regularly not those who have been playing unfair.
Housewives’ Requests
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Inflation related to food items has been rampant this year. This has dented the budgets of the finance managers at home badly. Also the salary freeze in most companies in India has limited the income too.
The reasons above have made purchase decisions related to white goods being postponed. Hope the Finance Minister will give some relief in the form of reduced taxes for these sectors.
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The last budget also saw the excise duty for automobiles being reduced from 8% to 4% for one year. Hope the concession will be made to continue for the next year also.
Requests from Self-Employed & Business People
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Please implement the GST (Goods & Service Tax) regime at least this year. A number of deadlines have been fixed and postponed till date. This is not helping anyone – the consumers, the manufacturers, the service providers, the State Governments nor the Central Government.
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The request to increase the self assessment limit (Rs.40 lakhs) for Income tax has been pending for many years now. Hope this will be granted in the budget this time.
Though the citizens of India as a whole may have a thousand more items to add to the list, the above wish list is one that covers requests that needs to be addressed urgently. As the saying goes, “Needs can be met, not wants”. These wishes have today become needs!
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