7 expectation of salaried people with this budget

There are some big expectations by common man with this new government. The first exam of this new government is Budget which will be presented in July 2014. Salaried person have also some expectation with this budget as they can keep more money in their pocket. The 7 expectation of the salaried people with this budget are as follows.

1- Standard deduction on salary- standard deduction is the main expectation of salaried people as standard deduction was allowed in the past. Moreover, expenses are allowed to claim on business income for calculating tax liability. So for uniformity in society, some standard deduction whether on inflation base or percentage basis will be a welcome step.

2- Transport allowance- transport allowance is very much low to Rs. 800 Rs. /month which was fixed in 1998. There is a big change in fuel prices as well as transport costing (recently railway increases fright). So it is expected to increase the transport allowance to Rs. 2000/month.

3- Medical expenses reimbursement- Medical expenses reimbursement by employer is Rs. 15000 per annum which was fixed in 1998. Medical cost has increased very much compare to 1998 and the reimbursement limit should be increased to Rs. 50000 per annum.

4- Children education allowance- Children education and hostel allowance is fixed to the extent of Rs. 100 and Rs. 300 per month per child up to a maximum of 2 Children which was fixed in 2000. Cost of education is also increased highly with a lot of new courses and specialized based education. So this allowance limit is also increased. 

5- Increase in limit of interest paid on housing loan for self-occupied property - Currently, the deduction for interest paid on housing loan taken for a self-occupied property is limited to Rs 1, 50,000 per annum since 2001. However, the real estate cost has increased multifold and consequentially the quantum of housing loan. Considering the increase in the cost of borrowing and current inflation, the eligible amount of deduction may be revisited for all taxpayers. This would result in additional tax savings for taxpayers.

6- Increase in threshold limit under Section 80C - At present, the deduction in respect of a variety of investments under Section 80C is restricted to Rs 1, 00,000. The investments made in various avenues under this section helps the government to raise funds and taxpayers to save tax. However, there are various types of investments which qualify for deduction under this provision with an upper cap of Rs 1, 00,000. Accordingly, in order to encourage enhanced long-term savings and investment, an increase in this limit to a reasonable level would be a welcome change.  

7- Refund and Tax credit - The taxpayers hope that the new finance minister could improve the current tax administration mechanism. Many taxpayers continue to face challenges in getting credit for taxes deducted at source and their tax refunds in time. While the Central Board of Direct Taxes has issued press reports on reduction of time limits in issuance of refunds, and has also adopted technology to improve this process, more can certainly be done on this front. Besides amendment in tax law for this purpose, the systems and procedures too need a thorough revamp to implement expeditious refunds.

8- Last but not the least, the new finance minister may consider increasing the basic exemption limit and change in tax slab in line with the tax rate proposed by the Parliamentary Standing Committee on Finance in its report on Direct Taxes Code 2010 (DTC Bill).The expected tax structure is as follows.

Income tax slabs expected
Tax rate
Upton Rs. 300000

300001 to 10 lakh
1000001 to 20 lakh
Above Rs.20 Lakh
These are 7 main expectations of salaried people with this new government which promised to bring good days. 
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About Nitin Aggarwal

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