DIRECT TAXES
| Budget 2011: What the aam aadmi would love to hear from the FM Mon, 21 Feb 2011 21:14:53 GMT |
| The recent inflationary trend in food items of daily consumption has caused havoc for the common man who is finding it difficult to manage his household budget. There is no single solution to address this problem and it requires a multi-pronged approach. Nevertheless, the common man has a lot of expectations from the finance minister. In this context, following points merit attention. The current basic exemption limit of Rs 1.6 lakh could be increased to Rs 2.5 lakh. Similarly, this limit could be enhanced to Rs 3 lakh and Rs 3.5 lakh for women and senior citizens, respectively. The existing range of slab rates could be widened, thereby reducing the effective tax burden on individuals. For example, the 10% tax rate could be made applicable for income between Rs 2.5 lakh and Rs 5 lakh. This would leave some additional disposable income in the hands of individuals, especially for the lower and middle-level income groups and help them meet their consumption requirements. Medical reimbursement limit of Rs 15,000 has been fixed long back and is not in line with the current economic reality of increased medical costs. Therefore, this limit could be revised to Rs 50,000. Similarly, the deduction in respect of medical insurance policies could be enhanced to Rs 50,000 for a family to enable the households to have a meaningful medical insurance cover for themselves. This would also help in further development of the organised medical services and provide a boost to the medical insurance sector. The popular deduction under Section 80C up to Rs 1 lakh, which, covers a wide range of savings and investments, should be enhanced to Rs 2 lakh. It is pertinent to note that individuals have only few tax savings options for their long-term retirement needs, therefore, this would also help government meet its larger socio-welfare objective. An additional deduction of Rs 20,000 can be availed for the tax year 2010-11 for investments made in long-term infrastructure bonds. This benefit should also be extended to the next year and the limit should be enhanced as there are not much effective tax savings at present on this account. This would help the government garner funds for long-term infrastructure needs. On the procedural side, in spite of the laudable measures taken by the government in the recent past, the common taxpayer still finds it difficult to obtain the tax refund. It is important to note that if one has booked his railway ticket online and subsequently cancels it, he gets his refund automatically in the account from which the payment was made initially. In case of tax authorities, while much more information and control vis-à-vis the taxpayer is there, it still takes time to get the refund. All details of the taxpayer like address, income and tax details, PAN etc are available at the click of the button, therefore, like railways, the tax refunds should be granted within a few days of the filing of the tax return. If this is not implemented, then the individual taxpayer should be allowed to adjust the refund of the previous year against the tax payable for the current tax year/future tax years. As is the case with any wish-list, it could continue with no end in sight. Still, the common man is looking up to the FM to help him manage his household budget, while the FM undertakes the tough task of managing the nation's budget! |
Online Poll