INSUBCONTINENT EXCLUSIVE:
This budget session is the last parliament session of the NDA government before general election due by May
Generally, in an election year, the ruling government opts for a vote-on-account or interim budget instead of a full budget
In previous four interim budgets, the outgoing government didn't announce any tax incentives for the taxpayers
If this tradition continues, we may not see any big announcements this year as well.The government in its maiden budget in 2014 had
incentivised the taxpayers by announcing various tax sops
The basic exemption limit was increased from Rs 2 lakh to Rs 2.5 lakh, the Section 80C limit was increased from Rs 1 lakh to Rs 1.5 lakh
These deductions were not tinkered with in all subsequent budgets, thus, leaving the taxpayers upset.The major focus of this interim budget
would be to align the welfare of small households with government schemes
Considering the various schemes introduced by the government in last two years, we have listed down our expectations from the interim
budget.A raise in the basic exemption limitThe basic exemption limit, which was revised last in 2014 by the government, in its maiden
budget, should be increased from current Rs 2,50,000 to Rs
Though the government has reduced the tax liability of small taxpayers by reducing the tax rate and revising the Section 87A rebate but
basic exemption limit has been remaining unchanged since 2014.This segment of taxpayers hardly pays a few thousands to the exchequer but the
administrative cost of collecting tax, processing their return and to refund the excess tax is enormous vis-a-vis the revenue earned
Thus, considering the cost-benefit analysis and to keep small taxpayers out of tax bracket, it should come first on the list of proposals.An
increase in threshold limit of Section 80CSection 80C is probably one of the most talked about provisions of the Income Tax Act for the
Through this provision, the government has inculcated the habit of saving in taxpayers which also helps in channelising the money for
infrastructure development
1,50,000 is allowed under this Section
The threshold limit was revised by the government in 2014
Considering the growth rate estimated by the government, the threshold limit for deduction under Section 80C should be revised to Rs
2,00,000.A deduction for medical expensesSection 80D provides deduction for medical insurance premium paid by a taxpayer to cover any future
There is large segment of taxpayers who don't have or can't afford to buy the medical insurance policies
Similarly, there are various medical expenses which are not covered by the insurance companies
The Income Tax Act allows deduction for the medical expenditure, in these cases, only to senior citizens and not to other taxpayers
Up to last year, medical reimbursements by the employer up to 15,000 were eligible for tax deduction under the head salary
Even this deduction was withdrawn by the Finance Act 2018 on pretext of standard deduction.The cost of medical care is massive and the
government should consider introducing the deductions for a taxpayer below 60 years of age to cover the medical expenses incurred by him or
her.Higher deduction of saving interestInterest received from banks/post offices on savings bank deposit is taxable in the hands of account
However, a deduction is allowed with respect to such income to the extent of Rs
10,000 under Section 80TTA
The Finance Act 2018 has increased this limit to Rs
50,000 for senior citizens while leaving the limit for other taxpayers unchanged
It is recommended that this deduction of Rs
10,000 should be at par with the deduction available to senior citizens (i.e
50,000).(Naveen Wadhwa is DGM at Taxmann.com)Disclaimer: The opinions expressed within this article are the personal opinions of the author
The facts and opinions appearing in the article do not reflect the views of TheIndianSubcontinent and TheIndianSubcontinent does not assume
any responsibility or liability for the same.
