The Union Budget 2014 is due sometime in the month of July. While there are a host of expectations from industry and individuals alike, here is what the burdened Middle class expect from the Budget:
Increase the income tax exemption limit.
There has not been any meaningful increase in the tax exemption limit in the last few years, apart from paltry adjustments. Increase in Income Tax exemption Limit to at least Rs 3 lakh will meet the increased cost of living. There are reports that the exemption maybe hiked to Rs 5 lakhs. Wait and watch.
Increase in the medical reimbursement limit
Limit for exemption for medical reimbursement as a perquisite should be increased to Rs 50,000 from the existing Rs 15000 to meet the increased cost of medical services. This has remained stagnant in the recent past.
Increase the limit of transport allowance.
The transportation allowance granted by the employer to his employee for commuting between the place of work and residence is tax-free to the extent of Rs 800 per month. This limit was fixed more than a decade ago, and needs to be revised upwards to at least Rs 3,000 per month, given the rising commuting costs.
Limit of investment under section80c needs to be increased.
Section 80C was again reintroduced in place of section 88 w.e.f. 1-4-2006. Limit of Rs 1 Lakh of Investment under section 80C was fixed in A.Y. 2006-07 and even after 8 Years the limit is same despite multifold hike in prices. The limit needs to be increased to atleast Rs 3 lakhs.
Faster income tax refund process.
Income Tax Refund needs to be processed faster and taxpayers should not be penalized for deficit in revenue target by withholding the refunds and further there should be a mechanism which can ensure that taxpayers should not be penalized for mistakes of tax deductor.
Home loan limit must be increased.
Home loan Interest exemption limit for self-occupied house was fixed at Rs. 1,50,000/- wef A.Y. 2002-03 and even after 12 Years the limit is same. The Limit should be raised to at least 5 Lakh considering the 6-7 time raise in prices of property across the country.