Bangalore: Ernst & Young has disclosed its wish-list during the pre-budget session. E&Y hopes to get the attention of Pranab Mukherjee, Finance Minister, on increasing the exemption limits of personal tax.

It highlights its wish-list as follows –

Income from House Property

Presently, interest payable towards building or purchasing a self occupied house is eligible for tax deductions up to the extent of 1,50,000. E&Y hopes to see this deduction limit raised to 3,00,000 as property prices have gone up.

 According to present tax norms, if a person owns 2 houses, one is considered to be self-occupied, while the other is considered a rented one. Taxes were charged by considering the notional value of the rent amount till now. E&Y is asking to alter this provision as it leads to many cases of tax evasion. This happens when the assessee under-values the worth of the 2nd house, paying less taxes in the process. The new norms should make it mandatory for the assessee to pay taxes on the real and not the notional amount. Direct Tax Code (DTC) will be making a few alterations in this norm. If the 2nd house is vacant or has no residents living in it, then the assessee will not have to pay any tax on it. He/she will pay taxes on it only of it is leased or rented, again on the actual property amount and not the notional one.