6 Things Taxpayers Expect From The Upcoming Budget

BANGALORE: Union Finance Minister Arun Jaitley is expected to present his first full term budget on 28^th February 2015. Taxpayers once again have started expecting that Budget will provide them long overdue tax reliefs. Individual and Salaried Tax payer expects that what Mr. Jaitley not done in last budget will do in this budget and increase income tax exemption limit from Rs. 2.50 Lakh to Five Lakh.

Some of the taxpayer expectations from the Coming Union Budget of Mr. Arun Jaitley are as follows:-

1. Increase in exemption

Over the years, the basic exemption limit for individuals has been steadily increased leading to a reduction in taxes and a higher after tax income for tax payers. It is, therefore, widely expected that the basic slab exemption limit will be further increased in this year’s budget.

The finance minister could look at increasing the basic exemption limit to at least Rs.3.5 lakh for individuals who are less than 60 years of age which will translate into a saving of at least Rs.10,300.

2. Child Education expense

Given the fact the children’s education expenses are soaring along with inflation, the same should be excluded from the blanket deduction under section 80C of Rs.1.5 lakh and be allowed as a separate deduction of up to Rs.1 lakh.

As this Budget will be the first full-fledged budget by the new government, the expectations all around are high. One hopes that the finance minister considers these aspects while finalizing the 2015 Union Budget.

3.  Increase in 80C deduction

Section 80C allows a deduction from taxable income for investments made by a tax payer in eligible investment avenues. The maximum limit for the deduction under section 80C was increased from Rs.1 lakh to Rs.1.5 lakh last year.

The section allows a wide choice of qualifying investment avenues to an individual and the government could consider increasing the limit of the deduction to Rs .3 lakh to allow tax payers to take advantage of this provision.

4. Double medical reimbursement

Medical reimbursements by the employer are currently exempt up to a maximum of Rs.15,000. Keeping in mind the increasing costs of medical services and cost of medicines, the limit for exemption for reimbursement of medical expenses could be increased to at least Rs.30,000.

5.  Higher deduction under 80TTA

A deduction of Rs.10,000 is currently available in respect of interest on savings accounts with banks and certain institutions. To encourage small savings, the deduction under Section 80TTA could also be extended to interest on time deposits with an enhancement in the deduction limit to at least Rs.30,000.

6. Increase transport allowance

The exemption of Rs.800 per month as transport allowance for commuting between home and office was fixed many years ago. This necessitates a hike in the exemption limit to at least Rs.4,000 per month.