The salaried class, as usual, has high expectations from Budget 2016, the third budget to be presented by the NDA government since it assumed power in May 2014.
The big hope is for a possible change in income tax slabs, which has not undergone a change in significant terms for the past several years. Cheap home loans, easy investment plans, relief in the tax slab are also being expected.
Income tax exemption limit
Informed sources told ANI correspondent that the salaried class is expecting a tax exemption limit in the region of Rs 3 lakh per year, besides other friendly amendments to the tax slab.
A majority of people relate exemption in tax limit to inflation, which means more the inflation, more the exemption limit.
On leave travel allowance (LTA)
According to the employees, the leave travel allowance (LTA) discount that is currently given twice in four years should be enhanced. There is also a demand for raising the tax exemption limit to Rs 10 lakh.
According to Section 80C of the Income Tax Act 1960, there is a proposal to end tax exemption limits. As per the Act, the tax exemption limit is currently around Rs 1.5 lakh.
On house rent allowance (HRA)
There is also hope that the house rent allowance (HRA) will be increased. Salaried persons who get a lump sum amount without an HRA component can claim a maximum (additional) deduction of Rs 2,000 per month under Section 80GG.
If the limit in investment is removed, then people will able to save more, as the circulation of liquid cash will be more and would help the government in the long run.
It is a given that the general public needs simple investment options. Other expectations include:
1. The discount for investment in infrastructure bonds
2. An improved national pension scheme
3. Fixed deposits for three years
4. Exempting children’s education allowance of Rs 100 per month and hostel allowance of Rs 300 per month from tax. People are now expecting these limits to be increased to at least Rs 1,000 and Rs 3,500 per month.
On hike in transport allowance
The salaried class is also expecting a transport allowance hike from the present limit of Rs 1,600 per month to at least Rs 3,000 per month.
There could be a reduction in stamp duty and registration costs to aid the common man in affordable housing.