The proposal to increase the personal income tax exemption limit from Rs.2 lakh to Rs.2.5 lakh in the Union Budget presented by Finance Minister Arun Jaitley on Thursday evoked mixed response from the salaried class and the middle-income groups in the city.
“Raising the income tax slab is definitely a welcome step. But it is not enough. The ceiling should have been increased to Rs.4 lakh,” said V.P. Giresh, manager, Union Bank of India, Cherootty Road.
The budget has also proposed to increase the tax exemption limit for investments from Rs.1 lakh to Rs.1.5 lakh and from Rs.1.5 lakh to Rs.2 lakh under Section 80C and Section 24, respectively of the Income Tax Act. “Certainly this will be of benefit to those who have taken a housing loan recently as also home loan aspirants,” Mr. Giresh said.
Many people want a complete makeover of the existing exemptions under Section 80C of the Income Tax Act. Several items have now been bundled together for the Rs.1-lakh exemption. This includes premium paid on life insurance, contribution to provident fund, repayment of the principal component on housing loan, tuition fees for students, and investments in small saving schemes and mutual funds.
Mary Sunil, a teacher of St. Michael’s Girls’ Higher Secondary School, West Hill, also feels that that the tax exemption ceiling should have been raised to at least Rs.3 lakh. “I was able to bring down the income tax after securing a housing loan. But even then I am paying tax,” she added.
Raising the ceiling would have been a relief when prices of essential things are soaring. “May be the increase will be enforced when the next budget is presented in another seven months,” Ms. Sunil said.
“The income tax ceiling was fixed 10 years ago. It should have been changed long ago. A direct tax deduction of Rs.50,000 will be a great relief to middle class professionals,” says M. Ranjith, medical sales representative.
