According to a survey by Assocham, a majority of salaried people want Finance Minister P. Chidambaram to raise the exemption limit on income-tax and increase deductions under various allowances so that they are left with more purchasing power.
1. Exemption limit on income-tax: Over 89 per cent of the respondents said that the slab oftax free income has not moved up in line with real inflation. The current basic exemption limit of Rs. 2 lakh should be increased to at least Rs. 3 lakh, while the limit for women should go up to Rs. 3.5 lakh. This will increase the purchasing power of individuals and stimulate demand.
2. Medical re-imbursement limit: With increasing healthcare costs, the existing tax free limit of Rs. 15,000 should be increased to Rs. 50,000, 89 per cent of the respondents said.
3. Transportation allowance: Currently, this is tax-free to the extent of Rs. 800 per month. This limit was fixed more than a decade ago, and definitely needs to be revised upwards to at least Rs. 3,000 per month, given the rising commuting costs across the country, according to the survey.
