Budget 2016: Expectations of a common man from the Finance Minister

In the run-up to the Budget, here are some things that the common man is expecting from the Finance Minister.

Rise in Income Tax Slabs: In spite of the ever-rising prices across sectors, thanks to both direct and indirect taxes, the basic exemption limit is still more or less the same. It is imperative that the basic exemption limit is increased from the current Rs 2.5 lakhs to at least Rs 5 lakhs.

Investment Limit: The present deduction available under Section 80C is up to Rs.1.50 lakh only and this is in spite of rising inflation and income. The limit should be revised and increased to at least Rs. 3 lakhs keeping in mind disposable income, deflating value and purchasing power.

Exemption from Savings account interest: The salaried person also desires a hike in the limit of taxable interest earned from savings accounts which is at present Rs. 10,000 u/s 80TTA.

Medical Cost: Health is the biggest worry for anyone and we all know the cost one has to incur on medical treatment in today's time. An increase in the exemption limits on medical treatment under income tax is much needed today and also introduction of world-class medical facilities at no extra cost. Apart from that, the present exemption limit of Rs.15,000/- provided by an employer as medical reimbursement needs to revised to Rs. 50,000/- at least, considering the cost of medical treatment for normal day to day illness at present.

Home Loan Benefits and Stamp Duty Charges: ‘Help me fulfill my dream to own a house', something which is echoed by all the taxpayers to the government, because over the last few years, real estate prices have shot up to a great extent and so has the home loan amount needed to fund this purchase. Hence, limits for tax deduction on these counts should be increased with immediate effect. Similarly due to the rise in home loan amount, interest on the same has also gone up and current limit of tax benefit on interest amount up to Rs. 2 lakh should also be increased to match the rising inflation.

Tuition Fees: The same goes for education cost, which is also increasing day by day. The Union Budget should increase the available deduction under IT act or make a separate deduction for the same; it should be made as a separate provision than what it is at present being a part of section 80C.

Infrastructure Bond: A deduction was available, earlier, for investment under infrastructure bonds up to Rs.20,000/-. The deduction has not been made available in the last few years and today it should be reintroduced with the enhanced limit.

Re-Introduction of Standard Deduction: As of now, salaried employees are treated at par with tax payers who are self-employed and running a business on their own. On the other hand, a businessmen enjoys tax deduction for the expenses incurred by them, but there is no such benefit for the salaried employees. It's time that government reintroduces the standard deduction for salaried class.

Expectations of Senior Citizens: To hike the limit of taxable interest earned from Savings accounts and introduce or reintroduce some Government sponsored investment avenues which can be helpful for Senior Citizens to park their money in. Health is the biggest worry coupled with no active income, but higher expenditure. The expectation is to increase the exemption limits on Medical Treatment.  

Rishabh Parakh is a Chartered Accountant and the Chief Gardener & Founder Director of Money Plant Consulting, a leading Tax & Investment Planning Advisory Service Provider. He also runs a personal finance blogcalled “Mango Investor” aka AAM Niveshak at www.mangoinvestor.com. Readers are invited to send their feedback to rishabhparakh@moneyplantconsulting.net.