With his fingers crossed and his heart beating faster than a hummingbird flapping her wings, Nishant is waiting for the 1st of February, 2017 with bated breath. Wondering what’s the occasion? Well, on the 1st of February, our Finance Minister Arun Jaitley will be announcing the 2017 Budget. And, just like our friend, Nishant, we can’t wait to hear it too.
One of the prime reasons why all of us here are eagerly waiting for the new budget is the hope that our government has included measures to ease the financial tension that demonetisation has caused. Experts across the country have anticipated quite a few reasonable measures that could (or rather should) be part of this year’s budget to ease the agony of demonetisation.
Let’s explore a few new (and popular) measures that should be a part of the Budget 2017 and we hope that at least a few among these make the final list:
Tax Exemption Limit
For all salaried individuals who haven’t yet reached 60, the current basic taxable yearly income is Rs. 2.5 lakhs. It would bring much relief to a major part of our country’s population if the non-taxable base income is raised from Rs. 2.5 lakhs by at least 1 lakh or so. If the minimum taxable income becomes Rs. 3.5 lakhs or above, the salaried will be able to enjoy a little extra cash than they do now.
Additional Reading: How To Calculate Your Income Tax?
The section 80C deductions are a boon to those looking to save on taxes while saving for the long term at the same time. At present, the maximum tax deduction is capped at Rs. 1.5 lakh for a financial year, under this section. Our government has always encouraged people to save money for the future (this is evident from their different schemes such as the Jan Dhan Yojana, Sukanya Samriddhi Yojana, etc.). Anyway, coming to the point, if the new budget raises the cap on the deduction under this section, it will help people save more money than they do now. And that’s good, isn’t it?
Perks For Going Cashless
PM Modi has been keen on converting India into a cashless society. If he is keen on promoting digital transactions, he will have to introduce incentive schemes for these transactions to attract the masses.
During the cash crunch situation, we did see a few such incentives in place, like the waiver of service tax for Credit/Debit Card transactions up to Rs. 2,000 and the 0.75% discount offered on digital payments made at petrol pumps. And we are hoping that more such incentive schemes are announced in this year’s Budget.
Additional Reading: Going Cashless: Here’s What You Should Know
A bus ride that cost Rs. 10 a few years ago, costs Rs. 50 today! An Uber Pool ride which used to cost around Rs. 80 a few months ago, costs Rs. 150 today. With transportation costs rising faster than our salary hikes, it is time our government provided us some form of relief. So, we’re voting for an increased conveyance limit.
Currently, the tax exemption under conveyance allowance is capped at Rs. 1,600 per month (Rs. 19,200 pa).
Medical Expense Exemption
Medical expenses, like transport prices, are skyrocketing. The rising cost of medical treatments calls for a higher tax-free reimbursement than Rs. 15,000 in a year. Let’s hope that our government officials get the point and enhance this limit.
Additional Reading: Deciphering Your Salary Slip
At present, the pension that an individual receives is taxed. However, if our government wishes to inculcate the habit of saving for the long term while creating a pensionable society, they’ll have to work towards making the National Pension Scheme (NPS) more tax-friendly. Such a move would also encourage more voluntary contributions towards NPS.
Bonus Read: Why Investing In NPS Is A Good Idea
Leave Travel Allowance
Currently, tax relief for Leave Travel Allowance (or LTA) is applicable only for two journeys over a period of four calendar years. Over and above this limitation, the exemption is also restricted to an economy class airfare or a first-class rail ticket for travel within India only.
So, what change are we seeking here? Since most Indian folks are flocking to foreign destinations to enjoy quality family time, it makes sense to extend the LTA tax benefits to international travel as well. And we’re not just talking about airfare, but other expenses such as accommodation should also be considered for exemption. Also, the LTA exemption should be applicable for each financial year and not just for two journeys in a four year block. Don’t you agree?
Anyway, we’ll get to know tomorrow (1st Feb, 2017) whether any of the above expectations have been included in the Budget 2017 or not. Fingers crossed!