After all the chaos of demonetization, everyone is keeping an eye on budget with the hope of getting some relief.
Salaried individuals, who are already messed up with their jobs, are fighting with inflation and are suffering from all the drama of currency change, are in hope to get some light from budget 2017.
Budget 2017 has already got everyone's attention before being presented because of two things-
- Firstly date of budget has been brought forward by 1 month
- Second due to inclusion of railway budget
- Third and the most important is implementation of GST
Key provisions that may be looked at in this Budget, particularly for the salaried individuals, are the following:
1. Increase in Minimum exemption limit of individual
Currently, income is chargeable to tax if it exceeds Rs.2, 50,000 in a year. In the last budget also these limits remain untouched. The increase in this limit will benefit the taxpayers at the bottom.(Or Rebate u/s 87A)
(But with the increase in basic exemption limit, taxpayers may get reduced and this may increase tax evasion)
2. Increase in exemption limit of allowances
There are tax benefits on several allowances such as conveyance, house rent, Leave travel allowance, children’s education etc. Their limits in no case match with existing inflation. These limits need to be revised long back but are still untouched.
3. Increase limit of deduction u/s 80C
To boost household savings limit of sec 80C should be increased.
4. Increase in an amount of deduction for the home loan:
Currently, deduction on interest of home loan is up to Rs. 2, 00,000 and principal repayment of Rs.1, 50,000. There is scope to raise deduction limit especially in Metros where most of the houses are priced above Rs.1crore.
5. Increase in deduction for rent paid where no HRA is received by employee
Generally, organization pay HRA to employee and exemption is available on the same. But there are some cases where organizations do not pay HRA or employee unable to claim HRA deduction due to unavailability of PAN of the landlord.
In that case, an employee can claim a deduction on rent paid under section 80GG of income tax. Currently max. limit on the same is Rs.5000 per month.
There is a need to increase the limit from Rs.5000 to at least Rs.10000 especially in metros so that it can match with the rent of decent accommodation.
6. More surprise gift like given last year in u/s 80CCD(1) and various schemes like the one in budget 2015 - Sukanya Samridhi Scheme.
Let us wait to read the fine print. Until then the countdown has begun.
CAclubindia
