Budget 2014-15 : Expected Income Tax Exemption Limit, Deductions, Reliefs and Rebates
Budget 2014-15 to be announced on 10th July, 2014- For Income Tax Service Tax Key Highlights Click Here >>
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BJP Election Manifesto 2014 does not outline in details what reliefs and discounts the party offers on income tax front. The manifesto rather focused on broad policy objectives like a non adversarial and conducive tax environment, rationalising and simplifying the tax regime etc. However, In its previous election manifesto 2009, the party had outlined few specific promises. Those promises which seemed quite justified five years ago, still hold good even in view of the existing scenario.
Following table attempts to deduce the specific promises of 2009 into probabilities of 2014 Budget of Modi Government.
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Promise made in 2009 Manifesto |
What it means |
What could be expected in 2014 |
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1. Promise to exempt personal income tax for those earning up to Rs 3 lakhs p.a.
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It is interesting to note that the promise was not to increase the basic exemption limit to Rs. 3 lakhs.
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Personal Income Tax can be exempted up to Rs. 3.00 lakhs. It is not much likely that it could go beyond that limit even after five years. This can be achieved by either raising basic income tax slab or by introducing a new rebate or amending existing rebate under section 87A. The rebate may provide that individuals with total income not exceeding Rs. 3 lakhs shall get a rebate of hundred percent of income tax |
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2. Promise to increase exemption limit for for women and Senior Citizens to Rs. 3.5 lakhs p.a.
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This implied that the basic income tax slab for male and female would be different |
The male and female basic exemption limit for can be different and expected as under: -For female Rs. 3.50 lakhs -For male Rs. 3.00 lakhs The Basic exemption Limit for Senior Citizen 80< Years c ould be expected at Rs. 4.00 lacs |
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4. Promise to exempt bank interest income except corporate and businessmen
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Here the intention seemed to give relief to salaried /retired person where fixed deposits with banks constitute still the most favoured investment.
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There could be a new deduction under chapter VIA distinguishing between businessmen and otherwise as under: 1. Deduction up to 100% on interest earned on term deposits with natonalised bank by non businessmen senior citizens; and 2. Deduction up to Rs. 50000/- per annum on interest earned on term deposits with natonalised bank by persons other than non businessmen senior citizens For interest income on savings bank account, the present deduction of up to Rs. 10000/- under section 80TTA should continue.
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