Budget 2015: Working Class To Be Gratified With Bonus

BANGALORE: As each year goes by, the Union finance minister would take the stage reciting the budget speech to many a hopeful 'aam aadmi', who waits patiently in expectance for news of tax reduction. This year, will not be spared from following the same routine as Arun Jaitley voices out his version of the budget speech, reports Rediff

Nonetheless here’s hoping for some good news as rumors have been making rounds that there could be a possible reduction in the taxes for middle and lower classes. The finance minister has given weight to this speculation when he expressed that he isn’t in favor of taxing the low-income groups.

Speculations are going strong which gives way to bated breath as finance minister might just declare a rise in the income tax exemption limit that is roughly about 50,000 to 3,00,000. Experts state that the tax concession for middle class will cost the exchequer around 17,000 crore (170 billion).

"One way of creating an impact for all tax payers is to tweak the slab rates. Increasing the tax exemption limit to 3,00,000 was the recommendation of the standing committee on finance, so increasing the tax exemption limit by 50,000 would be in-line with that recommendation," stated Vineet Agarwal, Partner, KPMG.

The Union Minister in his maiden budget had amplified the exemption limit by 50,000 bring the overall limit to 2,50,000. Focus has also been  placed on medical reimbursement, expenditure incurred by an employee not liable from taxation upto the extent of 15,000 per annum. The industry has advocated for amendments up to 50,000.

"Fifteen thousand of expenses incurred on medical reasons was set back in 1998, and till now the amount has not been changed. The Direct Tax Code has made the recommended increasing the limit to 50,000 so implementing that would a prudent measure on the part of the finance minister," said Agarwal.

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