With only a few hours left for the announcement of the Union Budget 2014, here are some changes Common man/ salaried persons expect in this year's Budget.
1. Increase In Basic Exemption Limit. : The most expected change in budget -2014 is increase in basic exemption limit from Rs 2,00,000 to 3,00,000. However rebate of 2000/- Rs is also allowed to person having total income less than Rs 500000 under section 87A .Further Many person expect changes in Tax slabs .But it is highly unlikely due to revenue loss involved in changing in tax slabs.
2. Restoration of Standard Deduction : Its long pending demand by salaried person to restoration of standard deduction .Earlier a Deduction of 30000 was allowed to salaried person under section 16(i) of Income Tax Act.
3. Increase In Exemption Limit of Allowance : Limit Fixed for many exempted allowances is on very lower side and has not been increased in comparison with the increase in the expenses.So it must be increased .(read present limit of exempted allowances )
- Increase In education allowance exemption limit from 100 per month per child for maximum 2 children to 500 per child.
- Increase In Hostel allowance Exemption limit from 300 per month per child for maximum 2 children to 1000 per child.
- Increase in Medical reimbursement exemption Limit from 15000 to 25000 per annum.
- Increase In transport allowance: Limit must be increased to 1600 from 800 earlier.
4. Increase In House Loan Interest deduction Limit: House loan Interest deduction limit is presently fixed at 1,50,000 which has been fixed in 2000. After 2000 cost of House has increased many fold so this limit should be increased to 250000-300000.
5.Increase In deduction Limit :
- Increase In 80C limit (saving limit)from 100000 to 150000-200000
- Increase in 80D (medical Insurance) Limit from 15000 to 25000
- Increase In 80 TTA (interest on saving Bank) should be increased to 20000 from 10000 . Further FDR interest and interest on other saving instrument like RB ,NSC must also be allowed under this deduction.
- Increase in 80GG limit (deduction for House rent) : should be increased from present limit of 2000 to Rs 10000/-
6. Increase in 54EC Limit : Long term capital gain can be saved by investing in bonds up to 50 lacs . This limit should be increased to 1 Crore from 50 lacs.
7.Tax Exemption to Senior citizen :Tax exemption Limit for senior citizens must be increased (60 years or more but below the age of 80 years) from Rs 2,50,000 to Rs 3,50,000 and for very senior citizens (80 years or more) from Rs 5 lakh to Rs 6 lakh.
8.Increase In exemption limit for clubbing of Income of Minor: Income of minors in the hands of parents/guardians is exempt to the extent of Rs 1500 for each minor. To meet the high cost of living and expenses on children the ICAI has suggested an increase in this amount to Rs 10,000.
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