Upcoming Budget 2012 on 16th March by our Finance Minister will meet certain expectation of taxpayers and as usual will disappoint us in most of the areas. Even though Mr. Finance Minister had promised to implement Direct Tax Code (DTC) to replace age old Income Tax Act, 1961, but it seems he would end up tabling another finance budget under the age old Income Tax Act, 1961.
Based on our experience and interaction with thousands of taxpayers and also since we are also a taxpayer, we believe that the government should give us following: –
Increasing Tax Exemption Limit:
From our experience we noted that when the basic exemption limit was Rs. 160,000 people use to declare Rs. 160,000. Today when it is Rs. 180,000, people declare Rs. 180,000, so the only way to unearth black money is to raise basic exemption limit.
Tax Slab for individuals (both women and men assessee) should be
Upto 800,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Nil
From 800,001 to 1000,000 Â Â Â – 10%
From 1000,001 to 15,00,000 Â – 20%
Above 15,00,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â – 30%
Senior citizens basic exemption limit should also be raised upto Rs. 10,00,000.
Additional Deduction under 80CCF may increase to Rs. 1 lakh
Introduction of additional deduction under 80CCF from assessment year 2011-12, provided tax relief to taxpayers. Moreover, this helped most of the institutions to raise funds from public for infrastructure investment during the year.Â So, expectation are high that this additional deduction will continue for the coming year too and the limit may be increased from Rs. 20,000 to Rs. 1,00,000 as with this tax exemption we get an opportunity to save taxes and build our country.
Exemption limit of Interest on Housing Loan
Its high time the government should enhance Grand Fathered exemption of Rs. 150,000 for Housing loan Interest considering the rising Interest rate and economic scenario. This will help atleast to save taxes.
Increase in exemption limit of certain allowance
Allowance which are exempt from tax upto certain limits like children education allowance, transport allowance, medical allowance etc., are too low. These limits must be raised to the limit which will give a bit relief to the salaried individual.
All Insurance policy dividends may be exempted from dividend distribution tax
All insurance policy dividends may be exempted from dividend distribution tax, so that there will be no tax deducted at source (TDS) on stock market brokerage fees, which are paid for such transactions.
Exemption limit of u/s 80C & 80D
All the old age deduction should be raised, so that one can in real terms avail deduction by making investments, like Mediclaim deduction of maximum limit of Rs. 35,000 should be enhanced so that it can actually cover health as well helps to save taxes.
The most popular deduction limit u/s 80C should be enhanced to Rs. 1,50,000 or certain investments should be segregated like PPF, LIC under different sections, which will bring great relief to taxpayers.
Provision of Section 44AD
The government in this Budget should also give clarification for the genuine business falling under section 44Ad provision, who incur genuine loss and have to get their books of accounts audited because of loss due to uncleared provisions of section 44AD. Objective of government behind the provision of section 44AD should be made cleared.