Budget 2017 – What a Common Man Expects from Jaitley
Budget 2017 is expected to be tax-payer friendly given the fact that it comes within months of demonetisation. The common tax-payer usually has several expectations every Budget, not all of which are met. We take a look at what a dream Budget 2017 for the common man would look like:
1. Finance Minister Arun Jaitley may consider relaying the slab rates as under:-
2. The medical reimbursement provided by the employer is tax free upto Rs 15,000. The said limit be increased to Rs 50,000.
3. Currently, the exemption for Conveyance/Transport allowance is capped at Rs 19,200 per annum (Rs 1,600 per month). This may be increased to Rs 36,000 per annum.
4. Expenditure incurred by the company in excess of Rs 50 per meal per person (net of contribution collected from employee, if any) is taxable. The limit be increased to Rs 100.
5. Leave Travel Concession may be expanded to include expenditure incurred for travelling to foreign locations as well include ancillary expenses like cost of boarding and lodging.
6. Rs 2 lakhs is currently available as a deduction for the interest paid towards the housing loan for a self-occupied house property. The deduction limit be increased to the lower of Rs 5 lakhs or actual interest paid.
7. At present, if an individual owns more than one house property and both the houses are either self-occupied or vacant, one of the house properties is required to be considered as Deemed Let-out property (DLOP) (at the option of the taxpayer) and notional rental income for the same is required to be offered to tax.
The recent trends reflect that most of the individuals relocate to a different city for job prospects. Such individuals may have two house properties i.e. one in the native and another in the city where the individual is working. Individuals may not be subjected to DLOP upto two house properties. As a corollary, the deduction on interest on loan may be restricted to one house property only.
8. Section 80C provides provisions for tax deductions for certain specified expenses and investments to the extent of Rs 1.5 lakhs. For salaried employees, a major portion is exhausted by their contribution to Provident Fund (PF). The Finance Minister may look to exclude the PF contribution out of the purview of Section 80C limit and provide a separate deduction on actual basis. Alternatively, the deduction limit be raised to Rs 3 lakhs.
9. Reintroduction of standard deduction for salaried employees.
10. Complete exemption of receivables at maturity under National Pension Scheme (EEE) would be another welcome measure.