The Union Budget 2009 has belied the expectations of all tax payers especially income tax payers! There is noting to cheer by aam aadmi as perhaps aam aadmi means a person who is not earning an income liable for Income Tax-that is what the UPA government thinks rightly so?
It is good that Surcharge of 10% on Individuals income of more than Rs. 10 Lakhs is abolished. But there is no change in Education Cess on Income-tax and Secondary and Higher Education Cess on income-tax as it shall continue to be levied for the purposes of the Union at the rate of two per cent. and one percent. respectively, on the amount of tax computed, inclusive of surcharge, in all cases. It would be better this is also abolished for simplification only and let there be an increase in basic tax rates suitably to make it simpler to calculate and file tax returns.
The Exemption Limit is increased by Rs. 10000 for Individuals (from Rs.150000 to Rs. 160000) and Women (from Rs.180000 to Rs. 190000) and Rs. 15000 for Senior Citizens (from Rs. 225000 to Rs. 240000).This is a meager amount. For all tax payers it should be increased minimum by say Rs.50000.
The age for Senior citizens must be lowered to 60 years from the present age of 65 years-to make it par with National policy of the government and many concessions under deposit schemes, railway benefits etc.
The present limit for deduction for medical treatment of a dependent suffering from disability is Rs.50, 000 if the dependant is suffering from disability and Rs.75, 000 if the dependant is suffering from severe disability. It is proposed to increase the limit for severe disability to Rs.1 lakh. However, the limit for ordinary disability is proposed to be retained at the existing level of Rs.50, 000. The medical bill in the present polluted environment for most citizens is too high. Therefore, for an individual and HUF assessees there should be a minimum of Rs. 50,000 per person in the family (including dependents members).
There is an Enhancement of the limit for payment of advance tax - with a view to providing for inflation adjustment, it is proposed to raise the threshold limit for payment of advance tax from the present five thousand rupees to ten thousand rupees. Id does not commensurate with inflation increase therefore further increase the limit suitably as Rs. 25,000. There is an Enhancement of the limit for payment of Wealth tax-with a view to providing for inflation-adjustment, it is proposed to raise the threshold limit for payment of wealth tax from fifteen lakh rupees to thirty lakh rupees. It is a welcome step. It is good that Fringe Benefit Tax is abolished.
The limits for Tax Deduction at Source (TDS) are not increased to make it realistic with inflation index. These limits were fixed quite a few years ago. At present there no time limits for passing of orders under many sections of the Income Tax Act like for an order of assessment under TDS etc. Each and every action-order passing must have fixed time limit for the benefit of tax payers and the income tax department too. I hope above suggestions shall be duly implemented before passing of the Budget in the Parliament.
MAHESH KAPASI & CO
M. Com., LL.B., FCA, FICWA, FCS
Ex Member: AMIMA, AMIBM, ACEA (London), MIIA (U.S.A.)