Budget 2015 – Expectations of Salaried employees in the income tax front
Budget
2015 may be yet another one, but financial comfort and rising hopes on
growing Indian Economy, may provide room for the finance minister Mr.
Arun Jaitley to announce more exemptions or reliefs in the income tax
front in this Budget. More than additional exemptions these measures can
be called as updating of Income Tax Exemption limit for various
allowances which were fixed very long ago which unrealistic to present
date.
Budget 2015 Wish List of Salaried Employees on Income Tax :
Basic Income Tax Exemption Limit :
Increase of Basic Income Tax Exemption Limit to Rs. 3 lakhs to meet out inflationary Trend.
Transport Allowance:
Transport Allowance is exempted to an extent of Rs. 800 per month.
However, the lowest amount of Transport Allowance of Rs. 400 (plus
dearness allowance) received by the employees in the Group C and MTS
cadres itself is taxable. So there is a very high need for increasing
exemption limit for Transport Allowance payable Government Employees.
Children Education Allowance:
Children Education Allowance is the other allowance, which is
exempted to an extent of Rs. 100 per month. Of course this exemption
limit was decided more than a decade ago when tuition fees of Rs. 100
was reimbursed to Central Government Employees. On implementation of
sixth Pay commission recommendations, Children Education Allowance has
been raised to Rs. 1000 and incremented when DA crosses 50% each time.
So, there is no point in keeping the slab on IT Exemption for CEA at
this low level. It is widely expected that Childen Education Allowance
is to be fully exempted from Income Tax.
Medical Reimbursement by Employer:
The present Exemption Limit of Rs.15,000 as far as medical
reimbursement is concerned provided by an employer needs to revised to
Rs. 50,000 considering the cost of medical treatment presently.
Health Insurance premium under Section 80 D:
Salaried Employees also expect an increase of exemption limit for
Health Insurance Premium paid to Rs. 50, 000 from the current level of
Rs. 35,000 (Rs. 15,000 for family and Rs. 20,000 to Parents)
Re-Introduction of Standard Deduction:
As of now, Salaried Employees are treated at part with Tax Payers who
are self employed and doing business of their own, as far as Income Tax
is concerned. But this was not the case 10 years ago (until 2004-05).
Just like Self Employed and Business related tax payers enjoy deduction
of expenses made from the income, a fixed amount was exempted from total
income of Salaried Employees which was termed as Standard Deduction.
One of the expectations of Salaried Employees now is re-introduction of
Standard Deduction for their income tax assessment.
Exemption Limit of Rs. 1.5 lakh for Savings under Section 80 C:
Also, Salaried Employees feel that Exemption of Rs. 1.5 lakh
available for Savings and Insurance Insruments as wells as retirement
plans is too low considering the number of investments allowed to be
exempted under this category. It is expected that this Exemption limit
has to be increased to Rs. 2 lakh at least.
Exemption limit on Rent Paid when no HRA is received :
Further, Rent paid by an individual is exempted now to an extent of
Rs. 2000 per month if no House Rent Allowance is received. This limit
was fixed in the year 1998. Needless to say house rent cost has
increased enormously since 1998. So, this exemption limit needs
immediate revision to match the current rental cost.
Source : Gconnect