Assocham has asked the Government to increase the personal income tax exemption limit in budget to Rs 4 lakh from Rs 2.5 lakh for all individual taxpayers. The industry body also demanded additional incentives for savings and higher tax allowance for expenditure on education and health, quoting findings from its Aam Aadmi survey. “Over 87 per cent respondents in the poll said increasing the basic tax exemption limit from the present Rs 2.5 lakh to Rs 4 lakh should be the minimum that the Finance Minister should announce in the 2016-17 budget,” Assocham stated. The industry chamber also recommended a hike in personal IT exemption limit to Rs 4 lakh in its pre-budget memorandum.
“The higher exemption limit was necessitated by increasing cost of living, particularly with regard to health, education and transport,” it added. Besides, noting that the amount of medical expenses reimbursed by the employer on treatment of employees or their family members is exempt from tax to the extent of Rs 15,000 per annum, 88 per cent of the respondents advocated hiking the limit to Rs 50,000 per annum as the present threshold was set way back in 1998.