Budget 2015: Taxpayers want more money in hand

The government is all gung-ho about having presented a moderate railway budget, a rather no-frills one, with more amenities promised. Well done, on the first stroke. Now, as we progress into the days before budget session is completed, tax payers are awaiting their turn with bated breath. Will the government allow them to have more money on hand? Will the income tax limit be increased, helping them have more savings and leave some money for expenses too?

If the indicators are anything to go by, the base limit for income taxation would be hiked by Rs 50,000 from the existing Rs 2.5 lakh (to be hiked to Rs 3 lakh). While the consumers, investors, and taxpayers have been waiting for the government to bring them some good news; it would be feasible to remember last year’s massive tax cuts had bled the government badly. The generosity showed on individual tax payers had led to an estimated loss of Rs 22,000 crore to the exchequer.

Even though the tax rate in India is moderate, the current budget is carrying a heavy load of expectations on its shoulders. Experts feel this budget would bring in more relief to people who had been reeling under the inflation crisis since long. Apart from the basic taxation limit being raised, the tax payers are also expecting some booty from the segment of tax saving deduction which comes under 80C to be hiked to Rs 2.5 lakh, paving way for varied savings plans. A separate deduction, they hope, would help them save up for a rainy day or even pension plans.

There is a segment of tax payers who are involved in this chain indirectly than having to be part of it. The home makers want the government to leave their spouses or earning members with more disposable income, considering the rising cost of education and necessary commodities.

The government, they feel should act to control the prices, which would be the only way to put the additionally saved disposable income to use. Cost of education needs to be made more affordable for middle class households who have been witnessing a stagnated income owing to various factors such as global economy slowdown and hike in prices of essential commodities such as food, fruits, medicines and vegetables.

Students who have turned self sufficient over a period of time, owing to the fact that student loan is well within their reach want the interest rates for their loan to be brought down. This needs to happen simultaneously alongside the creation of better employment opportunities, which would then ensure the return of capital investment on part of the government.

The government needs to take measures to popularise retirement schemes and savings right from the time a young professional goes to work, on two levels. The direct and important one would be the government benefiting from it. The second one would be about the individuals being able to make large savings over a period of time, without having to worry about mounting healthcare bills at their old age.

Saving under different headers would also bring down the risk of running high amount of taxes, and also ensure to being in some kind of social security system set up by self. That apart, this would also help the capital market procure funds for long-term development without having to worry about fluctuating tax rates with every year.

The tax collection methods need to be worked on to make them more efficient to bring in those individuals who have been evading taxes since long. Because of this, every passing year, the middle class is shelling more money out of its earnings to fund various government schemes, bearing the load all upon their fragile shoulders. This is leading to a widespread dissent among those who are paying taxes honestly and promptly at the end of every financial year.

The government is hoping to roll out GST – Goods Services Tax – effective next year. Having said this, the government should also take adequate steps to ensure that this does not hurt the schemes for poor, or burden the middle class with more expenses lined up under the guise of making things easier for them.

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