Four months into the Interim Budget and with the formation of the new government at the Centre last month, Indians are all set to welcome Union Budget 2019 this July. What makes this endgame even more exciting is the fact that Finance Minister Nirmala Sitharaman has made the Budget-making process a democratic exercise. Her move to seek inputs, ideas and suggestions from citizens before formulating the Budget has been hailed by all.
Digital India is making great strides and the government knows just how it can use this platform to bring its people together. When it comes to tax reforms, salaried individuals are making their voices heard by sharing their inputs and what they expect from the government. Saving taxes to get the most of their salaries still remains the most sought-after agenda.
To understand this better, we picked the most popular Budget expectations for 2019 that were posted on social media and the MyGov app. Here’s what most salaried employees really want from the government:
When it comes to tax reforms, salaried individuals are making their voices heard by sharing their inputs and what they expect from the government.
Like every other year, one of the most coveted and popular demands continues to be the revision of Income-tax slabs. In the interim budget earlier this year, the government had offered some relief by introducing a full tax rebate to taxpayers with income of up to Rs 5 lakh.
This explains why taxpayers under other brackets are also expecting a change in the slab rates in Union Budget 2019.
While citizens have come up with countless suggestions on tax slab revision, let’s look at the suggestion that’s practical and achievable -- According to taxpayers and experts, income of Rs 5 to Rs 10 lakh should attract 10% tax, individuals earning Rs 10 to Rs 20 lakh should be levied 20% tax, and those earning over Rs 20 lakh should be taxed at 25%. Possible? Let’s wait and watch.
When it comes to tax savings, Section 80C limits matter and how. There’s a huge demand to increase this limit from Rs 1.5 lakh to Rs 2.5 lakh or more. Since this limit was last revised in Budget 2014-15, it no longer holds good. A hike in Section 80C limits will help provide more room for tax savings. This feeling resonates among all salaried individuals big time.
It would also prove beneficial to salaried individuals with home loans as they’d be able to avail bigger tax benefits on interest payouts.
Citizens have put forth a demand of making the interest on Provident Fund tax-free. According to Income Tax laws, withdrawal from EPF before completion of 5 years is taxable. The taxability of an employee's contribution also depends on whether they had earlier claimed deduction under Section 80C while filing their ITR in the previous years.
Making withdrawal of EPF tax-free will encourage individuals to opt for the benefit and keep it invested as is, instead of never opting for it or withdrawing it and investing it elsewhere. This is a high in the list of Union Budget expectations for 2019.
For the longest time salaried individuals haven’t seen a hike in the various allowances and tax-saving benefits offered to the salaried population of the country. We’re talking about the past few decades, mind you. For example, meal allowance for employees is just ₹50 per day, children education allowance has a limit of a meagre ₹100 per month and the driver’s salary limit is as low as Rs 900 per month. It’s high time these limits are raised for practical purposes. Citizens have suggested that it would be of great benefit for salaried employees if the Union Budget 2019 considers increasing the limit of such employee tax benefits.
While tens of thousands of suggestions and expectations for Union Budget 2019 have poured in from social media, the MyGov app and other platforms, people await with bated breath as to what inputs will really be taken into consideration and implemented. As of now, spirits are high and there’s hope that the Budget will be worth looking forward to.