Budget 2017 is widely expected to bring in cheer for taxpayers, especially in the backdrop of demonetisation of old Rs 500 and Rs 1000 notes. FICCI (Federation of Indian Chambers of Commerce and Industry) has urged Finance Minister Arun Jaitley to revise the current income tax slabs and bring them at par with international standards. “Currently, the peak tax rate of 30% is made applicable over an income of Rs 10 lakhs for individual taxpayers. However, the income level on which peak rate is applied in other countries is significantly higher,” says FICCI. “Hence, there is a need for further raising the income level on which the peak tax rate would trigger, to make the same compatible with the international standards,” it recommends in its pre-Budget 2017 memorandum.
FICCI has recommended revised tax slabs for individual taxpayers, where a 30% tax rate should be applicable only if the income is above Rs 20 lakh. For taxpayers in the bracket of Rs 10 lakh to Rs 20 lakh income, FICCI recommends that the tax slab should be 20%. FICCI has urged the Narendra Modi government to implement the following tax slabs for FY 2017-2018.
Additionally, it wants that the Union Budget 2017-2018 should withdraw the levy of surcharge on individuals having income above Rs 1 crore. “The Finance Act, 2016 has levied surcharge @ 15% on individuals having total income exceeding Rs 1 crore. The surcharge @ 10% on individuals having taxable income above Rs 1 crore was introduced in the Budget 2013-2014 though only for a year. The surcharge on individuals has been increased over the years from 10% to 15%. It is observed that the increased surcharge on certain category of individuals distorts equity and tends to discourage entrepreneurship and incentivizes people to relocate to other locations,” FICCI points out.
Meanwhile, FICCI has also asked FM Jaitley to raise the deduction for interest paid under Section 24 to Rs 3 lakh. “The deduction available under section 24 of the Act is to a maximum limit of Rs 2,00,000/- for interest on loan taken for acquisition/construction of self-occupied house property. Given the rising interest rates and the increase in property prices and also to spur the demand for housing, it is recommended the exemption should be increased to at least Rs 3,00,000/- per annum,” FICCI says.
FM Jaitley is likely to present the Budget 2017 on February 1.