The Union Budget has watered down the expectations of salaried employees on income tax exemption limit. Employees say the government’s gesture is not impressive as they will hardly have any benefit, with meagre raise in the tax exemption limit.
The Union government raised the basic tax exemption limit to Rs. 2.5 lakh and Rs. 3 lakh for senior citizens. Investment limit under Section 80C was proposed to be hiked to Rs. 1.5 lakh from the current Rs. 1 lakh. Likewise, the Finance Minister increased the housing loan interest rate deduction limit to Rs. 2 Lakh.
Vijayawada Municipal Corporation (VMC) Employees Union leader Eswar said employees expected the government to raise the limit to Rs. 5 lakh. “The Centre should have raised the ceiling to Rs. 3 lakh at least if not Rs. 4 lakh. Mere hike of Rs. 50,000 will not suffice and help employees in any manner,” he said.
G. Sunanda, who works in the private sector, said the decision to raise the limit to Rs. 2.5 lakh would not bring any relief at a time when inflation was surging. Tax Payers Association secretary M.V. Anjaneyulu said the raising of I-T ceiling looked like an “eye wash” and added that the government should have raised the limit to Rs. 5 lakh as people expected.
“The taxpayer would have benefited by at least Rs. 30,000 a year if Rs. 5 lakh was the tax exemption limit. Now, it will not be more than Rs. 5,000. Raising the limit to Rs. 5 lakh would have boosted the economy, as people would have had savings which created a market,” he said.
Meanwhile, experts said the expectations were a bit far-fetched owing to the high fiscal deficit and slow economic growth.
