Introduction: Union Budget for the year 2014-15 going to be presented by the Finance Minister during forth coming budget session in the Parliament. Increase the economic growth & control the inflation are the major expectation from this budget by all. However each and every sector, person prospective, the expectation from this budget will be differ, in this article, myself here try to cover the some of the expectations by a salaried case from this budget.
1. Enhancement of basic exemption limit: Every individual has the expectation from this budget is to enhance the basic exemption limit from the current limit of Rs.2 Lakhs. In the view of current inflation & price level, the enhancement of basic exemption limit will lower the tax of an individual and increase the spending habit.
2. Revision in conveyance related allowances: Current exemption limit of transport or conveyance allowance u/s. 10(14) Rs. 800 per month has been fixed long years back. However the fuel price has been increased twice or thrice comparing old rates. But the limit of conveyance or transport allowance still in the same limit. The same issues are facing in the valuation of car perquisite which contains the fuel expenses. These limits related to fuel expenses can be relook by the government.
3. Revision in the medical expenses related exemption: The exemption of reimbursement of medical expenses limit of Rs.15000 per annum is the very low limit comparing the cost of medical expenses in current scenario. This can be relook and correct the limits.
4. Revision in education allowances: The exemption of educational allowance Rs.100 per child per month & hostel expenses allowance Rs.300 per child per month is the limit fixed long back. The same limit can be revisited and correct according to the current cost of education. Even though the deduction of tuition fees allowed under section 80C up to Rs. 1 Lakhs, expenses other than tuition fees also is the major amount in current educational costs.
5. Deduction in respect of notice period pay: This is most debatable issue during the change of employment. If employee resigns from the current employer and going with serving notice period, the payment made by the employee to employer to compensate will be deducted from his salary payable. But as per tax calculation it will be shown as income but there is no clear provision in deduction for the same. So it can be considered in this budget.
6. TDS problems facing by individual: Common problem facing by salaried individual/ non salaries case also is that TDS credit is not reflecting in the form 26 AS and unable to match the TDS amount. Even though TDS amount recovered from the income and deductor fails to pay the TDS or not update the TDS return, it is not reflecting in the form 26AS. This is very embracing situation for any person, after paying tax also not getting credit due mistake of others. Even though some recent judgements are favoured to the deductees, however this has to be provisioned in the act itself to avoid the litigation issues.
Conclusion: As per the purview of income tax act, Salary income is treated as risk free nature, hence most of the part of income is fully taxable, however the expenses depends on the inflation and other factors has to be revisited by the department and may make the changes accordingly. It is the very basic expectation from the upcoming budget by the salaried cases.
CMA Ramesh Krishnan
Tags Income Tax