Memorandum to Finance Minister regarding People's expectations from the Union Budget 2017.
ALERT CITIZENS FORUM OF INDIA
A7/303, Saket CHSL, Saket Marg, Thane (W) 400601 #8879528575
December 21, 2016
The Hon. Finance Minister,
Government of India,
North Block,
New Delhi.
Sub: Memorandum regarding People's expectations from the Union Budget 2017.
Respected Sir,
As the budget making process gets underway, the people of India are praying that the coming budget is able to please both – the suits as well as the aam aadmi – specially after the pain they have been receiving after the demonetization.
This year the government has parted ways from the colonial-era tradition of presenting the Union Budget on the last working day of February and this year, you will present it on February 1. And with the new beginning comes new expectations, which are already rising high.
Post demonetization, the government has rolled out many discounts to promote digital transactions. Hinting at rate cuts it has been announced that the demonetisation and push for digital transactions will enable to make both direct and indirect taxes more reasonable at 'some stage'.
Your statement has given hopes to many taxpayers. Even experts believe that after the 'courageous' currency ban move, taxpayers deserve some rebate.
Alert Citizens Forum of India is presenting below a synopsis of the expectations that the people of India - the Tax payers have from the government:
1. Reduction in Personal Income tax rates.
Expectation (from the Budget) is for the Government to reduce the personal income tax rates or enhance the tax slabs, probably as an incentive, given that Income Disclosure Scheme has resulted in additional revenue and the impact of demonetisation may bring in more taxpayers.
The initial proposal under the Direct Tax Code was to only tax income of 25 lakh and above at the rate of 30 percent. With the continuous rise in the cost of living, raising the exemption limit is the need of the hour. Currently, the exemption limit is Rs 2.5 lakhs.
2. Extending HRA exemption to Tier 2 cities.
The section of salaried employees, staying in rented homes, also have expectations from the Finance Minister. Prices of property is shooting up not just in metros but everywhere. Considering this, it is expected that the HRA exemption of 50% of basic salary, which is currently available only in case of metros, is also extended to Tier-2 cities.
3. Increase the exemption on Medical reimbursements.
In your third Union Budget of 2016-17, you had rolled out schemes and policies to further equip the healthcare sector of the country. With specific focus on improving the livelihood of the rural population, the Union Budget 2016-17 seemed to be aimed at putting more money in the hands of the citizens. However, in terms of personal health, keeping in mind the rise in the healthcare costs, the exemption on account of medical reimbursement is restricted to Rs 15,000 per annum, which should be at least, doubled.
4. Increase in 80C limit.
Under 80C, currently, the deduction in respect of various investments is upto Rs 1.5 Lakh. In a bid to boost savings; a corresponding increase in the limit to Rs 2 lakhs would be attractive.
5. Deemed Income taxation must be removed.
As regards the house properties, according to the present rules, house owners having more than one property are taxed on deemed income for unoccupied house. Many feel this rule is unfair, as there is no real income. Hence, a wide expectation is that this deemed income taxation should be removed and actual income earned should be taxed.
6. Amendment to Section 192.
Another amendment the taxpayer is looking for is under Section 192. This section of the I-T act does not provide for claiming benefits of Federal Trade Commission (FTC) at the time of withholding tax. This results in deduction and deposit of higher tax at the withholding stage leading to the employee claiming refund at the time of filing return of income. This causes hardships related to follow up of refunds. Because of which, the tax payers desire that that Section 192 is amended so that while calculating TDS at the salary; benefit of claiming FTC is instantly available.
7) Make pension income on maturity tax free.
NPS of national pension scheme is the new hope for salaried class to start accumulating money for retirement. In fact right now this is the best EPF alternative, but this tool is not EEE. That means maturity is taxable. So, the expectation is to make it tax free.
8) Fixed Deposits.
The concept of tax saving fixed deposit scheme should be withdrawn and instead of that one person should allowed to do a certain amount of FD / year without worrying about any income tax.
9) Mutual Funds.
The popularity of Mutual fund investments are growing in country and people have started understanding the concept of wealth creation. In such a case investment through ELSS mutual fund should be encouraged by putting some special income tax relaxation rule.
10) Make Home Loans easy.
After demonetization, it is expected that the real-estate market is going to get a correction in coming days. In such a case, a low home loan may increase the purchasing power of buyers and the real-estate market will get a direct boom.
11) Respite to Senior Citizens.
Senior citizens should be provided with much more relaxation in case of income tax or TDS rules from fixed deposit or income tax slab rate.
12) As people are travelling more abroad, the exemption limit for LTA is not enough in that case for the period of 4 years. So, please raise the LTA limit at-least for foreign travel.
There is a saying “There are only 2 certainties in life – death and taxes” and if historic records are anything to go by, one doesn't need a crystal ball to predict that the taxes of alcohol, tobacco, luxury goods and precious metals/gems will increase. The only question is by how much.
Then there is the new player in the tax space to contend with as well – GST. The certainty about GST is that it will be introduced during the 2017-2018 fiscal. The uncertainty is whether it will be introduced in its current form which has polarised opinion or in a more watered down and less polarised format with amendments. People eagerly await news on GST.
To conclude, Sir, the people of the country have supported the government during the demonetization phase. They now await and expect certain succour in the forthcoming budget 2017.
Hope and trust that you will give them their due.
Regards,
For Alert Citizens Forum of India,
Dayanand Nene
President
•Activist of Bharatiya Janata Party
•National Secretary: Consumer Protection Service Council.
Rajan Chandok.
Co author, BJP activist and Political Analyst
Alert team: Anirudha Godse, Jitendra Satpute, Prasad Bedekar, Kiran Joshi, Pramod Date, CS Sandhya Malhotra, Ganesh Iyer, Sanjiv Pande, Sudesh Khatawkar, Parikshit Dhume, Swati Bedekar, Sangita Koganur.
A7/303, Saket CHSL, Saket Marg, Thane (W) 400601 #8879528575
December 21, 2016
The Hon. Finance Minister,
Government of India,
North Block,
New Delhi.
Sub: Memorandum regarding People's expectations from the Union Budget 2017.
Respected Sir,
As the budget making process gets underway, the people of India are praying that the coming budget is able to please both – the suits as well as the aam aadmi – specially after the pain they have been receiving after the demonetization.
This year the government has parted ways from the colonial-era tradition of presenting the Union Budget on the last working day of February and this year, you will present it on February 1. And with the new beginning comes new expectations, which are already rising high.
Post demonetization, the government has rolled out many discounts to promote digital transactions. Hinting at rate cuts it has been announced that the demonetisation and push for digital transactions will enable to make both direct and indirect taxes more reasonable at 'some stage'.
Your statement has given hopes to many taxpayers. Even experts believe that after the 'courageous' currency ban move, taxpayers deserve some rebate.
Alert Citizens Forum of India is presenting below a synopsis of the expectations that the people of India - the Tax payers have from the government:
1. Reduction in Personal Income tax rates.
Expectation (from the Budget) is for the Government to reduce the personal income tax rates or enhance the tax slabs, probably as an incentive, given that Income Disclosure Scheme has resulted in additional revenue and the impact of demonetisation may bring in more taxpayers.
The initial proposal under the Direct Tax Code was to only tax income of 25 lakh and above at the rate of 30 percent. With the continuous rise in the cost of living, raising the exemption limit is the need of the hour. Currently, the exemption limit is Rs 2.5 lakhs.
2. Extending HRA exemption to Tier 2 cities.
The section of salaried employees, staying in rented homes, also have expectations from the Finance Minister. Prices of property is shooting up not just in metros but everywhere. Considering this, it is expected that the HRA exemption of 50% of basic salary, which is currently available only in case of metros, is also extended to Tier-2 cities.
3. Increase the exemption on Medical reimbursements.
In your third Union Budget of 2016-17, you had rolled out schemes and policies to further equip the healthcare sector of the country. With specific focus on improving the livelihood of the rural population, the Union Budget 2016-17 seemed to be aimed at putting more money in the hands of the citizens. However, in terms of personal health, keeping in mind the rise in the healthcare costs, the exemption on account of medical reimbursement is restricted to Rs 15,000 per annum, which should be at least, doubled.
4. Increase in 80C limit.
Under 80C, currently, the deduction in respect of various investments is upto Rs 1.5 Lakh. In a bid to boost savings; a corresponding increase in the limit to Rs 2 lakhs would be attractive.
5. Deemed Income taxation must be removed.
As regards the house properties, according to the present rules, house owners having more than one property are taxed on deemed income for unoccupied house. Many feel this rule is unfair, as there is no real income. Hence, a wide expectation is that this deemed income taxation should be removed and actual income earned should be taxed.
6. Amendment to Section 192.
Another amendment the taxpayer is looking for is under Section 192. This section of the I-T act does not provide for claiming benefits of Federal Trade Commission (FTC) at the time of withholding tax. This results in deduction and deposit of higher tax at the withholding stage leading to the employee claiming refund at the time of filing return of income. This causes hardships related to follow up of refunds. Because of which, the tax payers desire that that Section 192 is amended so that while calculating TDS at the salary; benefit of claiming FTC is instantly available.
7) Make pension income on maturity tax free.
NPS of national pension scheme is the new hope for salaried class to start accumulating money for retirement. In fact right now this is the best EPF alternative, but this tool is not EEE. That means maturity is taxable. So, the expectation is to make it tax free.
8) Fixed Deposits.
The concept of tax saving fixed deposit scheme should be withdrawn and instead of that one person should allowed to do a certain amount of FD / year without worrying about any income tax.
9) Mutual Funds.
The popularity of Mutual fund investments are growing in country and people have started understanding the concept of wealth creation. In such a case investment through ELSS mutual fund should be encouraged by putting some special income tax relaxation rule.
10) Make Home Loans easy.
After demonetization, it is expected that the real-estate market is going to get a correction in coming days. In such a case, a low home loan may increase the purchasing power of buyers and the real-estate market will get a direct boom.
11) Respite to Senior Citizens.
Senior citizens should be provided with much more relaxation in case of income tax or TDS rules from fixed deposit or income tax slab rate.
12) As people are travelling more abroad, the exemption limit for LTA is not enough in that case for the period of 4 years. So, please raise the LTA limit at-least for foreign travel.
There is a saying “There are only 2 certainties in life – death and taxes” and if historic records are anything to go by, one doesn't need a crystal ball to predict that the taxes of alcohol, tobacco, luxury goods and precious metals/gems will increase. The only question is by how much.
Then there is the new player in the tax space to contend with as well – GST. The certainty about GST is that it will be introduced during the 2017-2018 fiscal. The uncertainty is whether it will be introduced in its current form which has polarised opinion or in a more watered down and less polarised format with amendments. People eagerly await news on GST.
To conclude, Sir, the people of the country have supported the government during the demonetization phase. They now await and expect certain succour in the forthcoming budget 2017.
Hope and trust that you will give them their due.
Regards,
For Alert Citizens Forum of India,
Dayanand Nene
President
•Activist of Bharatiya Janata Party
•National Secretary: Consumer Protection Service Council.
Rajan Chandok.
Co author, BJP activist and Political Analyst
Alert team: Anirudha Godse, Jitendra Satpute, Prasad Bedekar, Kiran Joshi, Pramod Date, CS Sandhya Malhotra, Ganesh Iyer, Sanjiv Pande, Sudesh Khatawkar, Parikshit Dhume, Swati Bedekar, Sangita Koganur.
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