Budget 2015 – Expectations of Salaried employees in the income tax front
Budget 2015 may be yet another one, but financial comfort and rising hopes on growing Indian Economy, may provide room for the finance minister Mr. Arun Jaitley to announce more exemptions or reliefs in the income tax front in this Budget. More than additional exemptions these measures can be called as updating of Income Tax Exemption limit for various allowances which were fixed very long ago which unrealistic to present date.
Budget 2015 Wish List of Salaried Employees on Income Tax :
Basic Income Tax Exemption Limit :
Increase of Basic Income Tax Exemption Limit to Rs. 3 lakhs to meet out inflationary Trend.
Transport Allowance is exempted to an extent of Rs. 800 per month. However, the lowest amount of Transport Allowance of Rs. 400 (plus dearness allowance) received by the employees in the Group C and MTS cadres itself is taxable. So there is a very high need for increasing exemption limit for Transport Allowance payable Government Employees.
Children Education Allowance:
Children Education Allowance is the other allowance, which is exempted to an extent of Rs. 100 per month. Of course this exemption limit was decided more than a decade ago when tuition fees of Rs. 100 was reimbursed to Central Government Employees. On implementation of sixth Pay commission recommendations, Children Education Allowance has been raised to Rs. 1000 and incremented when DA crosses 50% each time. So, there is no point in keeping the slab on IT Exemption for CEA at this low level. It is widely expected that Childen Education Allowance is to be fully exempted from Income Tax.
Medical Reimbursement by Employer:
The present Exemption Limit of Rs.15,000 as far as medical reimbursement is concerned provided by an employer needs to revised to Rs. 50,000 considering the cost of medical treatment presently.
Health Insurance premium under Section 80 D:
Salaried Employees also expect an increase of exemption limit for Health Insurance Premium paid to Rs. 50, 000 from the current level of Rs. 35,000 (Rs. 15,000 for family and Rs. 20,000 to Parents)
Re-Introduction of Standard Deduction:
As of now, Salaried Employees are treated at part with Tax Payers who are self employed and doing business of their own, as far as Income Tax is concerned. But this was not the case 10 years ago (until 2004-05). Just like Self Employed and Business related tax payers enjoy deduction of expenses made from the income, a fixed amount was exempted from total income of Salaried Employees which was termed as Standard Deduction. One of the expectations of Salaried Employees now is re-introduction of Standard Deduction for their income tax assessment.
Exemption Limit of Rs. 1.5 lakh for Savings under Section 80 C:
Also, Salaried Employees feel that Exemption of Rs. 1.5 lakh available for Savings and Insurance Insruments as wells as retirement plans is too low considering the number of investments allowed to be exempted under this category. It is expected that this Exemption limit has to be increased to Rs. 2 lakh at least.
Exemption limit on Rent Paid when no HRA is received :
Further, Rent paid by an individual is exempted now to an extent of Rs. 2000 per month if no House Rent Allowance is received. This limit was fixed in the year 1998. Needless to say house rent cost has increased enormously since 1998. So, this exemption limit needs immediate revision to match the current rental cost.
Must Read : Income Tax 2014-15 related online tools:
Must Read : Income Tax 2014-15 related information:
- Income Tax Return 2014-15 (Assessment Year 2015-16) last date extended
- Income Tax Return 2014-15 (Assessment Year 2015-16) – last date extended for Gujarat
- Special Counters for filing ITR by Salaried Employees
- How to e-file ITR ? Step by Step guide to file Income Tax Return online
- E-filing ITR – Steps to register at Income Tax website for filing Income Tax Return Online
- ITR – Income Tax Return 2014-15 (A.Year 2015-16) Explained
- ITR-V for 2013-14 and 2014-15 can be submitted up to 31st October 2015
- Online ITR 2014-15 (A.Year 2015-16) launched by Govt
- Who should file ITR online this year on the basis of Total Income ?
- Download ITR-1, ITR-2, ITR-2A 2014-15 for Salaried Employees released by IT Dept