Union Finance Minister Arun Jaitley is expected to present his budget in the first week of July 2014. Just like industries, the salaried class has a lot of expectations from the new finance minister Arun Jaitley. Be it tax exemption, hiking the transport allowances, increasing the rebate cap on home loans, giving subsidies to farmers or addressing the issue of women’s and senior citizens’ taxation- the decision of the Finance Minister will be closely watched by all. Based on pre-budget recommendations given by ICAI keeping in mind the small tax payers are, this article would focus on Expectation ICAI have for small taxpayers from Budget 2014  . Foremost Requirement-Respect the “taxpayer”: Taxpayers who share a part of their income with the government as a partner in nation building are not getting their due respect.They are viewed as tax evaders.The government of India should treat the “taxpayer” as its client since he is the only source of revenue. A single ITR form to replace all ITR forms At present, we have different ITR forms for different assessees which make filing of ITR a cumbersome task. There should be a single form for all the assessees so that filing of return will be done in a simplified & effective manner. Rates of Taxes: Keeping in view the inflationary trends in the economy and the imperative to leave more disposable incomes in the hands of individual tax payers, particularly those in the lower income bracket, the Committee would recommend that the tax slab attracting „nil‟ rate, that is, full exemption from tax on income should be raised to three lakhs from the proposed two lakhs. Higher exemption limit may be considered for women and senior citizens. The age for senior citizens should be relaxed from 65 years to 60 years. with a view to giving some relief to the small tax payers, the Committee would recommend the following revised tax slabs : Slab (lakhs)                          Tax Rate 0-3                                         Nil 3-10                                      10% 10-20                                     20% Beyond 20                                 30%   Extension of time limit for filing of TDS Return:   As the filing of e-TDS returns is an onerous task, it is very difficult for assessees to collate and compile all the voluminous data/information for filing of TDS returns within 15 days from the end of the relevant quarter. Further, as the payment challans from banks reach the deductors by 10th of the next month, it becomes all the more difficult to file returns within a short span of time. Monetary limits in the Income-tax Act, 1961: The monetary limits for all exemptions or deductions were provided long back. In has been long since the same have been revised considering the prevailing inflationary conditions in India. An effort has been made to compile all such monetary limits with the Cost inflation index (CII) of the year in which they were last revised and the CII of the year 2013-14 to arrive at the figure of tentative present limit. Income of minors – to increase exemption limits under section 10(32: At present income of minors included in the hands of parents is exempt to the extent of Rs.1,500/- for each minor It is suggested that this should be raised to at least Rs.10,000/- for each minor child. Medical reimbursements for retired employees: U/S 17 of the Income Tax Act, medical reimbursements to employees are exempted from tax up to Rs.15,000 per annum. Further, the expenditure incurred by the employer for the medical treatment of the employees and his family in approved hospitals is also not treated as a perquisite in the hands of the employee. However, this tax benefit is not available to retired employees.  It is suggested that the provisions of section 17 be amended to include retired employees for the tax benefit on medical reimbursements / hospitalization expenditure in approved hospitals. Interest in borrowed capital: Keeping in mind the prices of the house properties and also the rate of interest on housing loan, it is felt that the deduction under section 24(b) in respect of Interest on borrowed capital for self-occupied property is very low.Therefore, it is suggested that the deduction in respect of interest on housing loan in case of self-occupied property should be increased from Rs. 1.5 Lakhs to Rs. 3 Lakhs. Preventive health check-up- Section 80D: At present, there is a limit of Rs.15,000 in respect of medical insurance premium of self, spouse and dependent children and Rs.15,000 in respect of premium paid for parents. The above limit would be Rs.20,000 instead of Rs.15,000, where any of the persons insured are above the age of 60 years. With the rising cost of medical treatment, it is necessary to have an adequate insurance coverage for all members of the family. Therefore it is suggested that the deduction of Rs.5,000 for preventive health check-up should be available in addition to the existing deduction for mediclaim premium. Increase in limit of deduction u/s 80DD & 80U: With the increase in the medical and travelling cost,maximum deduction in respect of medical treatment of a dependent who is a person with disability u/s 80DD and deduction for persons with disability like total blindness or mental retarded or physically handicapped person u/s 80U, should be enhanced suitably.It is suggested that the limit specified in section 80DD & 80U be enhanced suitably. Limits of House Rent Allowance (HRA) & 80GG: Considering the prevailing inflationary conditions in India, ICAI has suggested that the limits of both house rent deduction u/s 80GG and House rent allowance u/s 10(13A) should be reviewed and enhanced. Deduction in respect of interest on deposits in savings account- Section 80TTA: Section 80TTA as of now provides deduction of up to Rs.10,000 in the hands of individuals and HUFs in respect of interest on savings account with banks, post offices and co-operative societies carrying on business of banking. It has been suggested that Interest on all types of deposits must also be included within the scope of section 80TTA since it is likely that the salaried employees would transfer some portions of their savings to several deposits to earn comparatively better returns. Removal of anomalies in sections 111A & 112: It has been suggested by ICAI that appropriate provisions be made in the Act whereby the tax liability of an individual whose taxable income consists of only long term or short term capital gain, should not in any case, exceed the amount of tax liability calculated deeming the capital Gain as regular income. This can be done by making the provisions of Section 111A & 112 optional. Revised Return- Sec139{5): Section 139(5) provides for filing of revised return in cases where return has been furnished U/S 139(1) or in pursuance of notice under section 142. There is no provision of filing revised return in case where return is filed belatedly under section 139(4).It has been suggested that section 139(5) may be amended to provide that the revised return can be filed even in the case of belated return. Section 194I- TDS on rental income: Considering the general basic exemption limit of Rs.2,00,000/- and for Senior Citizens of Rs.2,50,000/- the present exemption limit of Rs.1,80,000/- seems to be too low, especially for those Senior Citizens whose source of income is only rent. Hence, the limit of Rs. 1,80,000/- under section 194I may be increased appropriately. It has been suggested that the exemption limit of Rs. 1,80,000 in respect of TDS on rent under section 194INshould be enhanced appropriately. Further, the provisions of section 197A should be made applicable only to those assessees who do not own more than one house property and whose total income does not exceed the maximum amount not chargeable to tax. Expectation ICAI have for small taxpayers from Budget 2014  .  Income tax return filing for FY 2013-14 has started, please click here visit our ITR filing page now.