New Delhi: Finance minister Arun Jaitley, who is all set to present his full year budget on Saturday, has a tough task in hand in order to make India the best place to do business, attract huge investments in India, signal long-term economic reforms, provide tax relief to India's vast consuming class, create job opportunities and making India regain its spot as an investors' darling.
There are high expectations among the common man of the upcoming Budget as they want to see some significant policy changes that would make a positive impact on their day-to-day lives. Clearly, the burden of expectations will be enormous for the finance minister.
Here we take a look at expectations of the common man:
Raising the Income Tax exemption limit from present Rs 250,000 to Rs 300,000
Since the working women's contribution to the economy has also increased, exemption for them too needs to be increased to Rs 4 lakh
Exemption limit under Sec 80-C from the prevailing Rs 1.5 lakh should be raised to at least Rs 2.5 lakh to channel more household savings into long-term financial savings.
Provide a separate deduction limit of Rs 1 lakh for investment in various life insurance products.
Suggestions are also pouring in to provide for a separate deduction limit of Rs 1 lakh paid to pension funds.
Under Section 80 D, a deduction of Rs 15,000 is provided for health insurance premium and payment made on account of preventive health check-up. Increase the limit to Rs 50,000 to further boost the health insurance sector.
Section 80TTA promotes savings by providing a maximum deduction of Rs 10,000 on interest income earned on savings bank account. The government should increase the scope of the Section to include interest earned on time deposits and increase the deduction limit to Rs 25,000 per year.
To encourage infrastructure development, 80CCF of the Act should be restored with an increased investment limit in infrastructure bonds from Rs 20,000 (allowed earlier) to Rs 50,000 for individual / HUF.
Increase in medical reimbursement: Currently Rs. 15,000 is allowed as medical reimbursement. With increase in health care expenses this should also be doubled.
Raising transport allowances
The decade old transportation allowances limit of Rs 800 as tax free should be increased to a minimum of Rs least Rs 3,000 per month, given the rising commuting costs.
Children education allowance
Educations sector is observing a phenomenal growth in the country but it is still in need of significant attention. At present, a maximum exemption of Rs 100 per month per child for a maximum of 2 children is provided; it needs to be enhanced to Rs 1000.
Deduction for interest on housing loans should be increased from current Rs 2 lakh to at least Rs 3 lakh considering the sharp hike in property prices.
Payment of principal amount on home loan: There is a demand to make a separate provision for the principal loan amount which is currently included in 80C under which maximum limit is Rs 1.5 lakh (all inclusive).
Launching of equity schemes
Deduction in respect of Rajiv Gandhi Equity Savings Scheme: The scheme encourages the flow of savings of small investors in the domestic capital market, and presents investors with tax benefits provisioned under a new section, 80CCG. It is recommended to raise the income ceiling to Rs 25 lakh as compared to Rs 12 lakh at present.
Permitting Infrastructure Debt Funds to issue tax saving bonds
Infrastructure Debt Funds (IDFs) should be allowed to issue tax savings bonds, and such issuances may be limited to a percentage of the net-worth of the IDF. Such tax-savings bonds, which give retail investors a tax exemption on the interest payable to them, thus providing an incentive for greater retail participation in IDFs.
Exemption limit for the senior citizens, should be raised from current Rs 300,000 to at least Rs 400,000 this would also give a boost to their retirement funds.
Students are expecting exemptions against education loans to be extended to 10 years from the currently allowed 8 years. Besides, they would not like further hike in service tax otherwise educational institutions will increase their fees.
Farmers should be provided with the cheaper rate of interest or no interest if possible, at least on agricultural loans. Also initiative to dcate farmers about the latest development in farming techniques would further enhance the productivity. The government should also ensure farmers get a good price for their cultivated product.