Rebate for Senior Citizens
The exemption limit for senior citizens over 80 years of age is Rs 5 lakh p.a., which when compared to other taxpayers sounds reasonable. However, in case of an income of more than the specified amount, they are required pay income tax @ 20% on income up to Rs 10 lakhs. Hence, the tax slabs need to be aligned to benefit super senior citizens so that they have a fair chance as compared to other taxpayers.
Leave Travel Assistance
Leave Travel Assistance is given to the employees by their employer on which employees avail a tax exemption twice in the span of four years. This exemption is provided under the section 10(5) of the Income Tax Act, 1961. The present rules provide that an employee can travel anywhere in the country along with their family; however, this travel exemption is not available for travelling abroad and neither for boarding and accommodation.
The law needs amendment as to make employees’ travel more enjoyable the exemption should not only cover travelling but lodging and boarding charges as well. Also, instead of giving this concession twice every 4 years, it should be given every year. Keeping in mind the kind of stress employees have to survive every day, the budget this year should include these amendments.
According to the prevalent section 64 of the Income Tax Act of 1961, when a person gifts his wife clubbing provisions apply and the wife’s income is either clubbed or combined with that of the husband. This law needs to be amended now and at least allow a reasonable amount to be given to a spouse without drawing provisions of section 64.
Goods and Service Tax
Amendments are proposed in the goods and services tax this year. According to the finance minister if there is consensus among all states on the issue of GST he will announce certain amendments which will tie all loose ends on GST.
Financial Exemption Limit
The financial limit i.e. the tax limit is increased once in a while by the finance minister. However, it needs to be aligned according to the increasing daily expenses. If this part is taken into consideration then the exemption limit for every individual tax payer should be Rs. 2,50,000 p.a. A lower exemption limit leads to tax evasion and it has been observed earlier that tax collection increases with a reduction in the tax limit.
All these changes are expected to make way for economic reforms and boost the country’s slow economy. What will happen eventually will unfold on February 28!