Budget Expectations: Wishlist of the common man

By Lovaii Navlakhi, Managing Director and Chief Financial Planner, International Money Matters

The year 2012 has set off and the time of tabling the Union Budget 2012 is approaching fast. Plagued by inflation the whole of last year, the common man has some serious expectations from this Budget.

The homemaker is looking for stability in prices of food items, and some relief from high prices of cooking gas. Taxes and duties that make consumer durable goods expensive goods to be reduced, so that these are more affordable especially cars.

The salaried class is expecting significant benefits from this Budget via the taxes. Exemption limits of allowances such as children education allowance, transport allowance, medical allowance etc., are very low in the current financial situation and inflation, having been fixed a long time back, when inflation was not this high. So expectations are that the allowances exempted from tax are increased along with rise in exemption limits under Sections 80 C and others from the present Rs.1 lakh to atleast Rs.1.5 lakhs. Exemption under Section 24 for the interest part of home loan repayment also to be extended from Rs.1.5 lakhs to Rs.3 lakhs.

Further revision in the tax slabs and tax rates applicable is hoped for as follows:

Up to Rs.2 lakhs                      -  Nil
From Rs.2 lakhs to Rs.5 lakhs  -  10%
From Rs.5 lakhs to Rs.10 lakhs-  20%
Above 10 Lakhs                       -  30%

Meanwhile, students are hoping that exemptions against education loans can be extended to 10 years from the current allowed 8 years. Further they hope there will be no further rise in service tax else school and college fees, tuition and coaching centres will all increase their rates.

For the senior citizens, they are looking at a revision of age from the current 65 years to 60 yrs. Further an increase in the exempted limit which currently stands at Rs 250,000 to perhaps Rs 300,000 would give a boost to their retirement funds.

Let