With the bugle being sounded, the expectations are very high from the new government and we hope that there will be some Fundamental changes brought about for the betterment of the Country. We also have a short wish-list that we will look forward to for the Income Tax laws governing all of us to enable us to be at par with the moving times and off-course provide a little benefit for all aam aadmi.
1. Taxable Income: The tax free income allowed in India is approximately Rs 2,00,000 and we look forward to an increase in the tax exemption limit. The tax exemption limit has been raised periodically; however the inflation has outpaced this increase.
2. Deductions/80C: With increased Income levels and a reduced proportion of savings it is imperative that the population be provided an incentive to save in long term instruments for future requirements. Moreover with a non-existent social security, savings become the life-blood in the retirement years. Hence, an increase of the limit for deduction on 80C will provide an incentive for all to save more.
3. Medical Expenses: The benefit available for medical expenses is miniscule and is required to be raised to practical levels. There can be check and procedure implemented to disable taxpayers from mis-using the facility. However the genuine people should not be denied a deduction of medical expenses also.
4. Refund: The Income Tax and also other Tax Departments have come a long long way from the dusty run down offices, to state of the art Filing and Data Storing centres. However much needs to be on the intent of the individuals and process manning the Refunds and other Department related operations. There is a requirement of having time lines and responsiveness in processing Returns and taking requests. Often the Tax refunds take couple of years, which has less to do with systems, but more to do with intent.
5. Housing Loan: With an exponential increase in the cost of property, the tax benefits for the purchase of residential property should also be enhanced. An average apartment now costs approximately Rs 1 Crore and a typical loan seeker will be paying an interest of Rs 3-5 laks per annum, however the Tax benefit is available only for Rs 1,50,000. Hence an increase in the benefits for Housing Loans will help thousands of borrowers across the country.
6. NRI Status: There has been much deliberation on the changes in the IT Act which will make many NRI’s taxable in India. However, the definition and the taxability is as per Global standards practiced by most developing nations, there may be instances where an Individual who has been enjoying an NRI Status for the past decade and more will now be taxable in India. This may increase evasion and also impact the inward remittances from a large section of the NRI diasporas. India has become the largest recipient of funds in the World, from its Citizens working overseas and this remittance has to a large extent been responsible to maintain a reasonable value of the INR in international markets. Hence it is important for the country to continue to receive the remittance from its sons working and toiling overseas and not to tax them in India unnecessarily.
7. Funds Transfer: With most businesses and Individuals having global operations, the movement of funds from one country to another should not be made too cumbersome to the extent of hampering business. There are numerous instances wherein the transfer of funds to and fro form India for either business or for Investments, gets mired in processes and procedures wherein finally people tend to use short-cuts which again leads to evasion.
A proactive and result oriented Tax procedures which are transparent and time bound will assist both the Department and the Tax payers to be happy and satisfied with each other.