-Manoj Sharma, Co-Founder, Policybazaar group
Tax Relief for Salaried class
The salaried class is generally tax compliant and pay their taxes with honesty. They should be rewarded and get special benefits for the tax amount paid by them. The Government can allow some deduction applicable only for salaried class, or they can be offered some incentive based on the tax paid by them. Also, allowance of chapter VIA deduction in new tax regime and extension of time limit for claiming deduction under chapter VI-A (till date of filing ITR) could be considered for salaried class.
Increase in 80C limit
It would be interesting to see an increase in limits for 80C since no revision has been made since many years now. Also, it will be beneficial if 80C limits can be linked to income slabs.
In addition, extra tax incentives for tax payers who invest in higher education will be a great move. Apart from that, any home loan (personal loan or loan against property) taken by tax payers for purchasing or constructing a house should get tax benefits.
I think insurance is an important aspect for everyone and government should encourage all salaried and other tax payers to purchase insurance plans at an early stage so that they remain insured throughout their life. A special new section should be introduced in the budget for allowing tax deduction on the amount spent on the insurance plans. Introduction of following tax benefits for loans other than home loans could also be considered,
a. Tax benefits for personal loan taken for construction or renovation of residential property.
b. Tax benefits on repayment of principal amount of education loan.
80C should be divided in 6 major segments with limit for each segment:
Education- Tax deduction for amount spent on education of children
Parents’ Health- Tax deduction for amount spent on parents’ health and insurance
Insurance- Tax deduction for amount spent on health insurance and term insurance
Medical expenses- Tax deduction on amount spent on medical treatment of major diseases for self and dependent family members and preventive health checkup.
Home loans- Tax deduction for EMI/ interest payments for loan taken for purchase of property for self use.
Donations- Tax deduction for grants given to NGOs working for social causes
Apart from the existing tax benefits available under 80C framework, following tax benefits could also be considered,
a. Allowing tax benefits for investment in various investment schemes such as REITS, AIF and other shorter period government schemes such as KVP, NSC.
b. Increasing the limit of investment in NSC.
c. Allowance of tax exemption or concessional tax rates for shareholders investment.