Common Man'S Expectations From The Budget
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Common man's expectations from the Budget

HR Administrator

Expectations of the common man are rising from this year's Union Budget.

Income-tax benefits are a good way to increase the disposable income in the hands of the common man and they are also keenly looking for that.

Here we take a look at a few of the key expectations of the common man, from the perspective of tax.

Liberalize tax slabs

As the economy is emerging out of recession and inflation continuing to be on the higher side, the common man expects that slab benefits should be further liberalized. At present a male taxpayer pays tax on income exceeding Rs 160,000 per annum. It would be a welcome step if this limit is increased to Rs 200,000. Corresponding limits for women may be increased from Rs 190,000 to Rs 230,000 and for senior citizens from Rs 240,000 to Rs 300,000.

Increase exemption limit of various allowances

The last time when the exemption limits of allowances like children education (Rs100 pm), hostel expenditure (Rs 300 pm) and transport allowance (Rs 800 pm) were revised was in 1997. Considering the current inflation and the cost of living, the exemptions can be raised to Rs 1,000 pm for children education, Rs 3,000 pm for hostel expenditure and Rs 2,500 pm for transport allowance.

Raise housing loan exemption limits

Considering the rising prices of real estate, the common man’s dream home still remains a dream. The government may consider the following: Allow deduction for interest during the construction period instead of allowing it only after the construction is complete. Raise the exemption limit for interest payment on home loan to Rs 300,000 from the current level of Rs 150,000 for a self-occupied property.

Increase in Section 80C limit

Section 80C of the Income-tax Act, 1961 allows deduction of up to Rs 100,000 for investments in a host of specified schemes like mutual funds, fixed deposits, provident fund, etc. Given that this section brings within its ambit many future benefits, the limit may be raised to Rs 200,000.

Health insurance premium

Health insurance premium paid by an individual can be claimed as a deduction up to Rs 15,000 if the insurance is for himself, spouse or dependant children. Increase the limit of Rs 15,000 to Rs 20,000 for health insurance premium paid for self, spouse and dependents parents; Increase the limit for senior citizens to Rs 25,000, considering that healthcare costs for senior citizens are

Deduction in respect of medical treatment for specific diseases

If an individual has incurred expenditure on medical treatment of specified diseases for self, dependent spouse, children, parents and siblings, the same can be allowed as a deduction from his taxable income.

In view of the increased expenditure on medical treatment for these critical illness, the limits may be raised to Rs 75,000 and Rs 125,000 respectively. To sum up, the common man is eagerly waiting for the announcements on the Budget Day and continues to hope for a pleasant surprise and more money in his hands for the year ahead.

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