Union Finance Minister, Nirmala Seetharaman has made a general appeal seeking suggestions, and ideas for resolution of various problems pertaining to industries and service sector to enable her to incorporate the same in her forth-coming budget in order to make it an inclusive budget.
In response to her suggestion during a discussion which she started with Assochem and FICCI, here are few suggestions put forth by MaaHyderabad team.
On the outset, I suggest the following measures to improve the ‘Disposable Income’ of individuals and certain suggestions for improving investment mode.
1. The personal income tax slabs are to be reclassified as follows: Upto Rs. 6.00 lakh no income tax. Rs.6.00 lakh to Rs 12.00 lakh 10% Rs.12 lakh to Rs.20.00 lakh 20% Above Rs.20 lakh 30%.
2. Interest up to Rs.1.5 lakh on housing loans availed up to Rs.35 lakh is available under IT act is exempted in 80C, subject to a cost of flat or house is up to Rs.45 lakh. (Known as Affordable Housing under PM Avas Yojana). The exemption to be given separately away from Section 80C. Interest on other housing loans is not exempted under a separate section, 80 C (investment up to Rs.1.50 lakh) is full with an Insurance premium, Provident fund, pension fund. This limit is to be increased to Rs.3 lakh for all housing loans up to Rs.100 lakh limit.
3. Interest payment on education loan is exempted up to Rs.2 lakh under Section 24. As an education loan limit increased to Rs.50 lakh in all banks, the IT exemption on interest payment needs to be increased to Rs.3.50 lakh.
4. Exemption of income tax on investment in infrastructure bonds to be increased from Rs.2 lakh to Rs.3.5 lakh.
5. Duty Drawback on exports of Engineering goods, IT services, Consumer goods like TV, Fridge, Air Conditioners etc and computer hardware products to be enhanced to 5% from the present 2%. This attracts many and Make in India succeeds.
6. Tax on dividends to be exempted up to Rs.1.00 lakh per individual from all companies.
7. Incentives to be given for Patents obtained in Engineering, pharmaceuticals, Information Technology, Space Technology and Medicine.
8. Investment on Research and Development in Pharma or Automobile or Chemical engineering etc up to 20% of net profit to be exempted from income tax.
9. Foreign tours of professionals to attend conferences and giving lecturers to be fully exempted under income tax.
10. Voluntary Disclosure of hidden profits and individual income to be introduced now with 40% tax on disclosed amount either from Indian banks or foreign banks.
11. In GST claiming Input Tax Credit to be made a minimum. The manufacturer or first supplier shall attach GST paid voucher along with Invoice bill.
12. A wealth tax of 5% needs to be imposed for persons having more than 4 houses or flats in cities.
13. For the MSME sector having investment up to Rs.100 lakh interest subvention by 2% to be given for all new industries.