Union budget is round the corner. Every taxpayer has his eyes on this budget. As everyone is aware, household expenses have risen high and only a reduction in tax outgo can give the taxpayer a respite. Though there are enough sections in income tax act to reduce the tax payable, lot of sections need to be revised for the exemption limits provided. Let us look at the top five expectations from union budget 2015:
1) Basic Exemption Limit
This is amongst the top expectations from this budget. The current basic exemption limit being provided is Rs. 2.5 lakh p.a. This is after an increase of Rs. 50,000 in the previous budget. Every employee wants the finance minister to have a re-look at this. Minimum expectation of rise in this is Rs. 50,000 and Maximum is Rs. 1 lakh. If this happens, there will be a tax saving of Rs. 5000 and Rs. 10,000 respectively.
2) Section 80C
This is the one of the most favourite tax saving sections for every taxpayer. As we all know, the previous budget saw an increase of 50% i.e. a Rs. 50,000 hike from Rs. 1 lakh in Section 80C. The same is expected this year as well, if not more. Section 80C limit is expected to go up to Rs. 3.5 lakh p.a. If this happens, it will result in savings of up to Rs. 10,000.
3) Medical Reimbursement
Medical expenses have touched the roof in the past few years. However, the medical reimbursement limit has remained standstill at Rs. 15,000 p.a. This does not match reality. There are a lot of demands as well as expectations on this limit to increase to at least Rs. 30,000 to 50,000 p.a. This will bring a lot of relief to taxpayers.
4) Transport Allowance
Transport allowance is the allowance granted to employee by the employer for travelling to office from home and back forth. This is currently at Rs. 800 per month which was fixed long back. With increased fuel expenses, this amount is nowhere near the actual expenses incurred. There are expectations that this limit will be increased to at least Rs. 4,000 to Rs. 5,000 per month.
5) Child Education Allowance
The most affected sector due to inflation in the past decade is children’s education. School Fees is one of the highest expenses for a common man. Currently, this limit is up to Rs. 1.5 lakh, raised from Rs. 1 lakh in the previous budget. However, this is part of the overall Section 80C limit. Expectation is that this limit is excluded from the Section 80C limit and allowed as a separate deduction.