Expectations of Individual Taxpayers from Budget 2013-14

Every year people wish that budget will bring some good news for them but mostly they turn disappointed every year. Salaried individuals mostly look for taxes and the deduction limit in budget, which may help them to save more taxes.

Budget 2013-14 is going to be announced very soon. These are some expectations of individual taxpayers from Budget 2013-14 –

Tax Exemption Limit:

  • The exemption limit under Income Tax is expected to be increased from Rs 2, 00,000 to Rs 3, 00,000 which means the tax liability will be reduced around Rs 10300/-. This will increase the disposable income of the salaried individual and would be a welcome change.
  • Further taxpayer wants the Tax Slab of 10 % should increase from Rs 5, 00,000 to Rs 6, 00,000.  And highest Tax Rate of 30% should be enhanced from Rs. 10,00,000/- to Rs. 12,00,000/-.

U/s. 80C Deduction Limit:

  • Under section 80C deduction limit may increase from Rs. 1, 00,000/- to Rs. 1, 50,000/- in this budget, it will increase Savings and deposit fund to help Government and increase social security.

Restore u/s. 80CCF:

  • U/s. 80CCF may restore again in Fin. Year 2013-14 for investors to increase the Fund and it will help Infrastructure Companies as well as it will increase Interest Rate as Infrastructure Bond with revised limit of Rs. 30,000/-.

Transport Allowance:

  • The Exemption of Transport Allowance limit has not increased sin long and due to more inflation and rising in fuel cost/prices it is require to increase Exemption of Transport allowance from Rs. 800 to Rs. 4,000/-.  Because 6th Pay Commission had increased the limit of Transport Allocance to all employee as well as Private sector also pay higher amount to Employee.

Medical Reimbursement and Children Education Allowance :

  • This budget may expect to increase Medical Reimbursement up to 30,000/- (Current limit is upto Rs. 15,000/-).  The Children Education allowance may be raised by Rs. 750/- per month for each child (not more than 2 Children).

Locking period of Tax Saving FDR:

  • Current lock period for Tax saving FDR is 5 years. It may reduce form 5 years to 3 years only.

U/s 80CCG:

  • The Rajiv Gandhi Equity Saving Scheme (RGESS) deduction u/s. 80CCG may enhance for those Tax payers whose Income more than Rs. 10, 00,000/- first time Investor.

Deduction of Repayment of Interest on Loan of House Property:

  • The deduction for Interest on House Loan may be increased from Rs. 1, 50,000/- to Rs. 2,00,000/- because of high cost of Real Estate sector and higher cost of constructions.

Limit of Leave encasement Exemption:

  • On Leave Encasement Exemption limit may be increase from Rs. 3,50,000/- to 5,00,000/- for all Employee whether it is Government Employee or Non-Govt. Employee.

House Rent Allowance (HRA) exemption:

  • In this regard due to higher construction cost many house property holders increases House rent and it is difficult to pay by Employee.  So, considering the increase in rental amounts, the exemption allowed under section 10 (13A) of the Act could be increased by the Government.

Under the current tax laws, the exemption is limited to the least of the following –
– Actual HRA received
– Rent paid in excess of 10% of salary
– 50% of salary or 60% of salary (in case of metros)
The salaried class will take benefit if the Government  looks at the above formula which provides little benefit to the salaried class who pays rent.

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