An overwhelming majority of respondents in a poll conducted by industry body Assocham want Finance Minister Arun Jaitley to increase the exemption limit on income tax in the upcoming budget.
“Over 87 per cent of respondents are for increasing the basic tax exemption limit from Rs. 2.5 lakh to Rs. 4 lakh,” Assocham said.
According to a majority of respondents, higher exemption limit was “necessitated” because of increasing cost of living, particularly for health, education and transport.
Mr Jaitley should also announce extra incentives for savings and more tax allowance for expenditure on education and health, the survey found.
“Medical expenses reimbursed by the employer on treatment of employees or family members are exempt from tax to the extent of Rs. 15,000 per annum. This limit was set in 1998 and it will be a welcome step for the government to consider increasing the exemption limit to a more realistic Rs. 50,000 per annum,” 88 per cent of respondents said.
Similarly, most respondents want tax deduction limit of Rs. 15,000 under Section 80D (payment of medical insurance premium) to be raised to Rs. 50,000 per annum.
Other expectations of a majority of respondents include,
1) 76 per cent of respondents want standard deduction for salaried employees to be revived. Standard deduction was earlier given as a lump sum for meeting employment-related expenses such as on conveyance, books, and so on.
2) 72 per cent of respondents want exemption limit on home loan interest on self-occupied property to be raised from current Rs. 1.5 lakh to Rs. 3 lakh.
3) The deduction of Rs. 1.5 lakh under section 80C should be doubled to Rs. 3 lakh to promote investments and encourage saving among taxpayers.
4) Leave encashment exemption limit for tax calculation should be raised to Rs. 10 lakhs from Rs. 3 lakh.
5) Children education allowance exemption limit should go from the present Rs. 100 to Rs. 1,000 per month. Hostel expenditure allowance should be increased to Rs. 3,000 per month (for maximum of two children) from Rs. 300 per month. Exemption limit of conveyance allowance (currently Rs. 1,600 per month) should be increased