New Delhi: Former Finance Minister and senior BJP leader Yashwant Sinha echoing the voice of millions of income tax payers urged the Finance Minister Pranab Mukherjee to raise the tax exemption limit in the Union Budget on Monday. (Agencies)
There are about 40 million income tax payers in the country.
Sinha, who was in charge of the Finance Ministry during the NDA regime between 1998 and 2002, has a few tips for Mukherjee, who will present his Budget for 2011-12.
The former Finance Minister wants the government to provide some relief to the middle class people from inflation, particularly high food and fuel prices.
"...he (the Finance Minister) should introduce some of the provisions, which are part of the DTC, like raising exemption limit on income tax," Sinha said.
The annual exemption limit for income tax at present is Rs 1.6 lakh per annum for men and Rs 1.9 lakh for women. The threshold for senior citizens is Rs 2.4 lakh.
He said the minimum exemption limit should be raised to Rs 2 lakh in line with the proposed Direct Taxes Code, which is under examination of Standing Committee of Parliament on Finance, headed by Sinha.
He also pitched for reintroduction of standard deduction, which was stopped in 2006. A fixed amount is deducted from the earnings of salaried employees over and above the tax exemption threshold, for arriving at their taxable income.
Sinha said the provision of standard deduction should be brought back to help the middle class people, who have been impacted by high inflation hovering around 8 per cent.
He also said that tax incentives on savings should be enhanced. At present, savings up to Rs 1 lakh is deducted from the taxable income. Extra deduction of Rs 20,000 is allowed for investment in infrastructure bonds.
Sinha suggested that there should be a higher limit of deduction for taxable income for interest paid on housing loans. At present, it is fixed at Rs 1.50 lakh.
Sinha said these are the measures which people expect from the Finance Minister to limit the impact of the price rise, which has eroded purchasing power of the common man.
New Delhi: Former Finance Minister and senior BJP leader Yashwant Sinha echoing the voice of millions of income tax payers urged the Finance Minister Pranab Mukherjee to raise the tax exemption limit in the Union Budget on Monday.