Raise tax exemption limit to Rs 300000, say professionals

Professionals are clamouring for a rise in current tax exemption limit of Rs 200000 to atleast Rs 300000 in line with the inflation, so that monthly disposable income is slightly higher.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney
moneycontrol.com

Home » News » Personal Finance » Tax

Feb 14, 2013, 07.58 PM | Source: Moneycontrol.com

Raise tax exemption limit to Rs 300000, say professionals

Professionals are clamouring for a rise in current tax exemption limit of Rs 200000 to atleast Rs 300000 in line with the inflation, so that monthly disposable income is slightly higher.

Like this story, share it with millions of investors on M3

Raise tax exemption limit to Rs 300000, say professionals

Professionals are clamouring for a rise in current tax exemption limit of Rs 200000 to atleast Rs 300000 in line with the inflation, so that monthly disposable income is slightly higher.

Post Your Comments

Share Cancel

Lovaii Navlakhi (more)

Founder & CEO, International Money Matters | Capital Expertise: Mutual Funds ,Fixed Income ,Insurance

By Lovaii Navlakhi, MD & Chief Financial Planner, International Money Matters

It’s the last budget of the UPA-II and expectations are running high despite the budget being a non-event in present times.

Professionals are clamouring for a rise in current tax exemption limit of Rs 200000 to atleast Rs 300000 in line with the inflation, so that monthly disposable income is slightly higher.

Other exemption limits on deductions from taxable income in various sections should also be increased keeping in mind inflation of the last few years.

  • The number of investments that are eligible for deduction from taxable income under Section 80C are many but the overall limit is only Rs 100000 which is just not enough. For many professionals, this limit is exhausted by investments like EPF, life insurance premiums and principal component of a home loan. There is very little scope of saving tax through other investments like ELSS, PPF, bonds etc.
  • Section 80D which covers deductions against medical insurance premium needs to be increased from the present cap of Rs15,000 as health insurance with adequate sum assured for a family of four costs more; if the government wants everyone to take health insurance seriously and protect themselves from huge medical bills, a higher limit would encourage people to invest in medical insurance atleast to save tax.
  • Housing costs have increased as have the interest costs thus making investment in a house more expensive than before. But the tax exemption on the interest portion of the home loan repayment is still Rs 150,000. This should certainly be increased and in fact, the principal component of this repayment should be allowed as a deduction separate from Section 80C to allow a higher net income for individuals.
  • Professionals who are salaried have to make do with really low limits for non-taxable allowances. Rs 800 p.m. for conveyance to and fro from office; Rs100 p.m. per child for education and Rs 15,000 as medical allowance/re-imbursement for the whole year. These are limits that haven’t changed in 8-10 years to keep up with fuel prices or education and medical inflation. Expectations are that these limits will be addressed now or atleast with the Direct Tax Code.
Buy, Hold, Sell ? Hear it first on M3
Raise tax exemption limit to Rs 300000, say professionals

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login