Axe the Tax: What the common man wants from Jaitley's Budget

 Ahead of the Narendra Modi government's first Budget, CNN-IBN presented your wishlist of taxes that you want axed, to Finance Minister Arun Jaitley as part of its award winning Axe the Tax campaign. This year, you asked for an increase in the Income Tax threshold from Rs 2 lakh to Rs 5 lakh.

You have also asked for increasing the cap for claiming exemption on housing loan interest from Rs 1.5 to Rs 3 lakh, increasing the exemption limit of Rs 15,000 for reimbursement of medical expenses to Rs 50,000 and increase in conveyance allowance from the current Rs 800 per month.

The wishlist included a demand to hike the savings exemption limit under Section 80 C from the current Rs 1 lakh to Rs 3 lakh. As part of the Axe the Tax campaign, CNN-IBN met a young working couple who explained how this would make a difference to them and to thousands of others.

Mathew and Vineetha George, both IT professionals with two young children and the need to save for their future. Both income and cost of living have risen over the years, but the Rs 1 lakh exemption cap on savings has stayed unchanged since 2007. A rise in this cap will enable Mathew to invest in his children's education and his own future.

"I would strongly recommend the government to have a limit set to the maximum, that way the government can get more money from the salaried class and it will be a motivation for a person like me to invest more in government sector," Mathew said.

The Direct Tax code has recommended increasing the ceiling on investment and expenditure to Rs 1.5 lakh a year. An increase will shore up the savings rate, which has been falling in the past few years. It will also provide a safety net for private sector employees like Mathew.

"The practice is that when we earn, the government will just grab money from us as tax, but when we do not have any job the government is least bothered about the people who are working in the private sector unlike foreign countries," Mathew said.

With the rapid rise in inflation, disposable income is falling. A review of the savings limit is now a necessity. "If the government gives a provision if I can save up to Rs 3 lakh, I will suddenly look for different ways to cut down on my expenditure. I will not spend much money on expensive clothes, gadgets, cut down on eating out. I may not invest in gold," Mathew said.

 

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