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19 February, 2016

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Budget 2016: Expectations of Salaried Class

Budget 2016: Expectations of Salaried Class
Our Hon’ble Finance Minister Mr. Arun Jately is going to present financial budget for FY 2016-17 on 29th February, 2016. The salary class of India expects these for relaxations from the Budget 2016.
Under section 80C of Income Tax Act, 1961, the maximum limit for deduction is of Rs. 150000/- for the amount invested in PF, NSC, LIC, ELSS, PPF, Repayment of principle amount of housing loan, child tution fees etc. The limit is same for all irrespective of the personal income of any individual. The salary class expects the ceiling criteria under section 80C for specify the deduction limit, as per the income of a particular individual.
The exemption of Rs. 15000/- of the reimbursement of medical expenses has not changed since F.Y. 1997-98 (FY, from which it is applicable). Although the cost of medical treatment is increasing day by day, the Govt .has not increased the limit in 18 years. Even the Consumer Price Index No. published by Labour Commissioner’s office in Maharashtra for Mumbai city, has increased from 8640 in Feb.1997 to 33442 in Feb.2016(24802 points up,about 300 times) during this period. Probably all involved in preparing and passing the Budget are not aware about rise in costs of medical treatment, being lucky to get free medical treatment, for doing the noble service to the people.
The amount received on account of Leave Travel Assistance is exempted, subject to cost of 2nd class A.C. fare, only twice in a fixed block of 4 years. This provision is in force from F.Y. 1988-89. It is very cumbersome to keep a track of when an employee has claimed LTA in a block of 4 years. In addition most of the establishments LTA is payable on the basis of calendar year. It may happen that an employee will claim LTA in say in May 2015 and January 2016 for two calendar years but in one F.Y. Further if an employee claims LTA every year and even if submits proof for expenses, he will get exemption only for two years.
The exemption is allowed only to the extent of fare. What about the expenses of Lodging, Boarding, Sightseeing etc? Perhaps the persons who are making these rules are getting all such facilities free. So they may not be aware that the public has to spend money on such accounts.
The Salary class expects a fixed amount with ceiling like medical reimbursement, should be free of Income Tax, without hassle of keeping records for certain no. of years.
Same is the case of Education allowance. The exemption amount is unchanged for many years in spite of the cost of education increasing day by day. The exemption for education of a child is only Rs.100/- p.m. and maximum of Rs.200/-p.m. for two children. This is irrespective of whether the child is studying in KG class or in college.
The salary class expects a minimum of Rs. 2000/- p.m per child should be free from income tax.


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