On fringe benefits tax
Although fringe benefit tax (FBT) continues to be an irritant for all employers, it has forced them to restructure corporate compensation packages, so as to reduce effective tax on benefits, which, earlier were either not taxed at all, or were being taxed at full rate, as ‘perquisites’ in employee’s hands. If FBT has to stay, it would need serious rationalization, as several items included under FBT today, defy justification.
On home loan interest deduction
The present annual upper limit of Rs 150,000 for deduction in respect of interest on housing loan for self-occupied house, is grossly inadequate. With a view to uplift the ‘aam aadmi’ to aim for better living standards and also provide a stimulus to the banking and housing sectors, this limit needs to be increased to at least Rs. 300,000.
On 80C deductions
Currently, section 80C provides for an annual deduction of Rs 100,000 in respect of specified investments, housing loan repayment, contribution to provident fund (PF) and so on. This limit is again grossly inadequate, given the steady increase in salary levels and thereby, the contribution to PF. An increase to at least Rs 300,000 is needed to encourage savings and investments.
Mark Twain rightly said “Climate is what we expect, weather is what we get”. The FM succeeded in pulling out some unexpected rabbits from his hat on last Budget Day. Let’s hope the sun shines bright once again for the individual tax payer, come July 6, when the FM unfolds his Plan.
on your mobile
On your phone browser type 