I EXPECT the budget to go in favour of the tax paying people especially because this year the government has received a wonderful verdict from the tax paying people and the voters of India. Hence, it is possible for the government to implement good tax provisions in the sphere of streamlining the tax provisions of the country.

Direct taxes
As far as direct taxes are concerned, the tax provisions should be streamlined and the various limits presently available in the Income Tax Act should be tuned and should be raised in view of the inflation in the country. For example, the limit of tax audit which is presently Rs 40 lakh should be enhanced to at least Rs1 crore. The enhancement of the limit of the tax audit would help the small tax payers to do away with the hassles of getting the accounts audited just when the turnover exceeds Rs 40 lakh. Moreover, this figure of Rs 40 lakh was introduced long time back and even if we go by the cost inflation index theme even then it is suggested that the limit of tax audit should be at least Rs 1 crore.

Increase section 80C limit
Likewise, the limit of deduction in section 80C also requires to be enhanced. It is suggested that in addition to the deduction under section 80C amounting to Rs 1 lakh, the tax payers should be granted higher deduction and exclusive deduction in respect of investment in infrastructure bonds. This will boost infrastructure investment. It is expected and it is felt that a large sum of money can be gathered by the government for the development of infrastructure in the country by providing a special tax benefit by way of an exclusive deduction under section 80C for investment in special infrastructure bonds. Similarly, to tackle black money the Government can come out with some positive approach so as to tackle the menace and to bring home the large quantity of black money which is lying abroad.
Also, the deduction with respect to interest on housing loan which presently is Rs150,000 per annum, it should be increased to at least Rs 3 lakh in view of the inflation in last so many years.

Re-introduce standard deduction
The standard deduction to salaried employees which was taken away couple of years ago should be restored. The Government should bring back the standard deduction which was earlier available to the salaried employees. It is a fact that salaried employees are required to spend at least some money during the course of their employment. In the past, the standard deduction was limited to 33-1/3rd of salary income which was subject to a particular amount. At present no such deduction is available, hence, it is suggested that the government should come out with the proposal to grant at least some deduction to the salaried employees from their salary income.

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e-mail: Subhash Lakhotia

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