Mumbai: To gauge the mood of the common man on the eve of the budget, we asked some of them for their idea of a dream budget or at least suggestions for inclusion in the budget. As an illustration, we have here a wish-list from a Chartered Accountant from the financial capital of the country, Mumbai. It expresses in a nutshell what the fraternity expects of the new Finance Minister.

1. Turnover wise Income Tax For Partnership Firms/LLP:

In the case of Domestic Company –Where its total Turnover or Gross Receipt during the   previous year 2016-17 does not exceed Rs. 250 Crore - Rate of Income Tax is 25 % and in case of any other Domestic Company it is 30 %.

The Partnership Firms and LLP is taxable at the rate of 30 % for a long period, Similarly as Companies, the Partnership Firms/LLPs should also be categorized based on Turnover Slabs, and the rate of taxation on Partnership firms and LLP based on Turnover should be reduced.

2. Increase Limit for Deduction Under Section 80C:

Limit for deduction under Section 80C of the Income Tax Act, 1961 has been enhanced from Rs 100,000 to Rs 150,000 in the Union Budget 2014. It is recommended to increase the limit by Rs. 50,000 in the Budget 2019-20 and enhance from Rs. 1,50,000 to Rs. 2,00,000/- to encourage more savings in investments.

3. Investment in Specified Deposits and Instruments Lock In Period Should be Reduced: Investment in NSC, KVP, 5-year Post Office Term deposits, 5-year bank fixed deposits, the lock in period for the mentioned schemes to be reduced to 3 years from currently 5 years so that there will be more investment flow in the schemes to encourage more savings in investment in the mentioned schemes.

4. Revision in Tax Rates in Income Tax Slab:

The Basic Exemption limit currently is Rs. 2.5 lakhs. The Individual tax payers with annual income up to 5.00 lakhs after considering all deductions under  section 80C, 80CCC, 80D, 80G etc to get full rebate. (i.e . increase in rebate upto Rs.12,500 from Rs.2,500) Therefore, individuals who are drawing an annual income of up to Rs.5 lakh will not be required to pay any income tax.

In addition to that, individuals with an annual income of more than Rs.5 lakh,  (i.e. Rs.5,00,001 and up), the individual will not be eligible to avail the benefits of the rebate.  the tax rates has been reduced for the Income Slab Rs. 2.5 lakhs to Rs. 5.00 lakhs from 10% to 5% whereas in the next slab of Rs.5.00 lakhs up to Rs.10.00 lakhs it straight goes to 20%, The Budget should consider lowering the tax rate in this particulars slab (up to 10%).

5. House Rent Allowance:

The House Rent Allowance for Salaried employees staying in the four metro cities Mumbai, Kolkata, Delhi and Chennai can claim higher deduction of HRA.  The Rentals in other cities like Pune, Bengaluru, Hyderabad, Ahmedabad, Noida, Gurgaon are also high as there are many employment opportunities in these cities and demand for housing is also on the rise,  hence the rentals are also high. The HRA exemption in these cities should also be increased.

(The writer can be reached out at swayambansode@gmail.com)