New Delhi: Industry body Assocham on Saturday said it has proposed to raise the basic exemption limit for individual income taxpayers in its pre-Budget memorandum to the government.
According to the industry body, the basic exemption limit for an individual taxpayer should be raised to Rs five lakh from Rs 2.50 lakh in the backdrop of the inflationary impact over the years.
“Considering the inflation over the years, tax exemption limit should be increased from Rs 2,50,000 to Rs 5,00,000,” the chamber’s memorandum to the Finance Ministry stated.
The new government would present its first full Budget 2019-20 to Parliament on July 5.
Besides, the chamber suggested that to bring a parity amongst salaried and non-salaried taxpayers, “it is desirable that standard deduction be reinstated in the statute. Approximately 20 per cent of the gross salary subject to a maximum limit of, say, Rs 1,00,000 could be considered for the purpose of standard deduction.”
At present, a disparity exists between salaried employees and self employed, resulting in higher tax being paid by the former. Currently, a standard deduction on salary of Rs 40,000 is provided.
“Standard deduction is not meaningful to large number of salaried tax payers as substantial portion of the deduction is offset by levy of additional cess of 1 per cent which was levied vide Finance Act, 2018,” the industry body said.
Additionally, Assocham proposed that to promote savings, deduction under section 80C should be raised from Rs 1,50,000 to Rs 3,00,000 per annum.