A pan-Indian urban survey reveals that salaried people, including those in the private sector,?unanimously feel that their IT limit should be raised?considerably.
A vast majority of the salaried class, employ?ed in a host of trade and industry sectors, want the Finance Minister P Chidambaram to raise the exemption limit of income tax to at least `3 lakh and increase deductions such as medical and educational allowances in the Union budget so that they are left with more purchasing power, a comprehensive Assocham survey across major cities has indicated.
The surveyed cities are: Delhi-NCR, Mumbai, Kolkata, Chennai, Bangalore, Ahme?dabad, Hyderabad, Pune, Chandigarh, Dehradun, Kochi. Titled, Budget 2013: Common man?s expectations from the FM, it examined 2,500 employees from the different sectors.
Over 89 per cent of the respondents said that the slab of tax-free income has not moved up in line with real inflation. The current basic exemption limit of `2,00,000 should be increased to at least `3,00,000, with the limit for women going upto `3,50,000 lakh. This will increase the purchasing power of individuals and stimulate demand.
?Pushing the basic exemption limit will help the tax payers in saving on taxes and also align it with the proposals made by the parliamentary standing committee on the Direct Taxes Code (DTC),? the survey noted.
With increasing healthcare costs, the existing tax-free limit of `15,000 should be increased to `50,000. The same also needs to be considered in the budget, said 89 per cent of the respondents.
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 `800 per month. This limit was fixed more than a decade ago, and definitely needs to be revised upwards to at least `3,000 per month, given the rising commuting costs across the country, adds the survey.
?Additional benefits related to housing, the deduction limit for payment of interest (on self-occupied property) has remained constant at `1,50,000 since 2001. There is an increase in property prices, and accordingly the amount of loan. An increase in the exemption limit to `2,50,000 will be a welcome change,? reveals the survey.
?Section 80C of the IT Act provides a deduction of `1,00,000 for certain investments. This provision helps people in making forced savings that, helps them in the future. A common man expects this limit to be increased to `2,00,000, with sub-limit of `50,000 exclusively for insurance and pension, adds DS Rawat, secretary general Assocham.
Wide spectrum covered
The survey was able to target employees from 18 broad sectors, with the maximum share contributed by employees from IT/ITes sector (17 per cent). After IT/ITeS sector, contribution of the survey respondents from financial services is 11 per cent. Employees working in engineering and telecom sector contributed 9 per cent and 8 per cent respectively in the questionnaire.
Nearly 6 per cent of the employees belonged to market research/KPO and media background each. Management, FMCG and infrastructure sector employees? share is 5 per cent each in the total survey. Respondents from power and the real estate sector contributed 4 per cent each. Employees from education and food and beverages sector provided a share of 3 per cent each. Advertising, manufacturing and textile employees offered a share of 2 per cent each in the survey results.
Around 55 per cent of the survey respondents fall under the age bracket of 25-29 years, followed by 30-39 years (26 per cent), 40-49 years (16 per cent), 50-59 years (2 per cent) and 60-65 years.
?Investments in infrastructure bonds are currently allowed for a deduction up to `20,000. These bonds have proved to be quite popular and the limit should be increased to `50,000 and those withdrawn must be restored, considering that the government needs massive funds for the development of the infrastructure sector. Also, the lock-in period must be restricted to five years,?added 82 per cent respondents.
Over 71 per cent of the respondents demanded that the national pension system (NPS) be brought under the exempt-exempt-exempt (EEE ) as against exempt-exempt-tax (EET) at present. This means that investors get a tax exemption at all three stages of investment, appreciation and withdrawal.?
Category: City, City News
Source: http://postnoon.com/2013/02/15/indias-middle-class-wants-income-tax-limits-raised/108691
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