Finance Minister Nirmala Sitharaman will present her maiden Budget on July 5. Among the various demands from the finance minister from different sectors of economy and industries, Delhi-based Assocham has in its Pre-Budget Memorandum demanded that the deductions under the Section 80C of the Income Tax act be increased to Rs 3 lakh from the existing limit of Rs 1.5 lakh. Industry body Assocham said the current limit needs to be revised with passage of time, and a higher limit will promote savings and building of capital.
Among other demands Assocham has asked that an amendment be made to increase the quantum of standard deduction. "Standard deduction on salary of Rs 40,000 does not provide any substantial relief to salaried persons and needs to be increased. Standard deduction is not meaningful to large number of salaried tax payers as substantial portion of the deduction is offset by levy of additional cess of 1 per cent which was levied vide Finance Act, 2018," according to Assocham's pre-Budget memorandum.
For the children's education allowance, the industry body has demanded that limit for exemption be raised to Rs 1,000 per month from Rs 100 per child for maximum of two children as the current limit is very low.
For exemption under the leave travel concession, Assocham has asked the finance ministry that the exemption for leave travel in Budget should not be limited to two journeys in a block of four calendar years, but should be allowed every year. The trade body has also urged the ministry that the exemption in the Union Budget 2019 should be provided on accommodation and meals as well.
Due to escalation in rentals, the limit for exemptions under the Section 80GG of the Income Tax Act should be increased to Rs 10,000 per month in the Union Budget as the current deduction under section 80GG is given for rent paid by non-salaried employees, not in receipt of house rent allowance, to the extent of Rs 2,000 per month, according to Assocham.
If the demands of the industry body are accepted under the Union Budget by the finance minister, it will come as a big relief for tax payers, say financial analysts.