Suggestions for the forthcoming Union Budget – 2017

1. Taxation slabs are to be reworked as follows (all Amounts in Rupees):

Note: There is no gender preference or discrimination of individuals.

These limits shall be linked to some benchmark say Consumer Price Index and shall be automatically revised in the annual budget every year, in future.

2. Following exemptions under Chapter VI-A must be available in addition for the individuals.

* These are new sections proposed to be inserted

NOTE: Aggregate amount of all the above-mentioned exemptions shall not exceed ₹6 Lakhs.

Depreciation

1. Depreciation for Car, Air-conditioners and other movable assets like refrigerators used in day to day life must be an allowable expenditure for the salaried class too, as is the case for businessmen and self-employed professionals.

2. Rate of Depreciation per year will be as follows.

• (a) Land - Nil
• (b) Building – 5%
• (c) Wooden items – 10 %
• (d) Mechanical Devices – 15%
• (e) Electrical Items – 20%
• (f) Vehicles – 20%
• (g) Computers & Electronic Gadgets – 30 %

3. Depreciation can be claimed only for an asset whose original cost is above ₹20,000.

4. Purchase of fixed assets in a year is restricted to the ceiling of 20% of the gross income for the relevant financial year.

Others

5. As for Conveyance, if the reimbursement is done in terms of a specified quantity of petrol, then for 2 wheelers, exemption must be given up to 30 litres a month and for 4 wheelers, exemption up to 60 litres a month is to be given.

6. If a fixed amount is paid as conveyance allowance every month, the exemption limits per month are as follows.

• (a) 2 Wheelers – ₹1,800
• (b) 4 Wheelers – ₹3,600

7. For persons who are subject to frequent transfers (say, not less than once every 5 years), the entire portion of their HRA is to be exempted from tax.

8. In case of quarters/leased accommodation provided by the employer, it shall not be treated as a perquisite and is to be fully tax-exempt.

9. For Housing Loans up to ₹30 Lakhs (availed from Banks/Financial Institutions), the entire interest paid/payable for the year is to be tax-exempt.

10. In case of loans given by the employer on concessional terms (interest-free advances included), they shall be taxed at the hands of the employer, not the employee.

11. Dividends exceeding ₹24,000 shall be included in the income of the recipient and taxed accordingly.

12. Interest amount up to ₹36,000 is to be made tax free for all aged below 60 years and ₹60,000 for those who are aged 60 years and above.

Expenditure Tax

It is proposed to introduce Expenditure Tax on the following types of expenditure and purchases.PAN is essential for all these items.

1. Purchase of Gold

• (a) Above ₹50,000 and up to ₹5 Lakhs – 2%
• (b) Above ₹5 Lakhs and up to ₹50 Lakhs - 3%
• (c) Above ₹50 Lakhs - 5%

2. Purchase of vacant land (other than agricultural land up to 10 acres)

• (a) Above ₹50 Lakhs and up to ₹5 Crores – 2%
• (b) Above ₹5 Crores and up to ₹50 Crores - 3%
• (c) Above ₹50 Crores - 5%

3. Purchase/Construction of House or any other immovable property

• (a) Above ₹1 Crore and up to ₹10 Crores – 2%
• (b) Above ₹10 Crores and up to ₹50 Crores - 3%
• (c) Above ₹50 Crores - 5%

4. Marriage of Self, Siblings or Children

• (a) Above ₹50 Lakhs and up to ₹1 Crore – 5%
• (b) Above ₹1 Crore and up to ₹10 Crores - 10%
• (c) Above ₹10 Crores - 20%

5. Celebration of Birthdays, Festivals & other Events

• (a) Above ₹1 Lakh and up to ₹5 Lakhs – 10%
• (b) Above ₹5 Lakhs and up to ₹10 Lakhs - 15%
• (c) Above ₹10 Lakhs - 20%

Luxury Tax

It is proposed to introduce Luxury Tax on the following items:

1. Hotels & Restaurants (Food & Beverages Bill)

• (a) Above ₹5,000 and up to ₹10,000 – 2%
• (b) Above ₹10,000 and up to ₹25,000 - 3%
• (c) Above ₹25,000 - 5%

2. Purchase of Dresses and Garments

• (a) Above ₹1 Lakh and up to ₹5 Lakhs – 2%
• (b) Above ₹5 lakhs and up to ₹25 Lakhs - 3%
• (c) Above ₹25 Lakhs - 5%

3. Purchase of Perfumes and Cosmetics

• (a) Above ₹10,000 and up to ₹50,000 – 5%
• (b) Above ₹50,000 and up to ₹5 Lakhs - 10%
• (c) Above ₹5 Lakhs - 20%

4. Lodging – Basic Rent per day

• (a) Above ₹5,000 and up to ₹10,000 – 2%
• (b) Above ₹10,000 and up to ₹20,000 - 3%
• (c) Above ₹20,000 - 5%

5. Purchase of 2 Wheeler

• (a) Above ₹1 Lakh and up to ₹3 Lakhs – 2%
• (b) Above ₹3 Lakhs and up to ₹5 Lakhs - 3%
• (c) Above ₹5 Lakhs - 5%

6. Purchase of 4 Wheeler

• (a) Above ₹10 Lakh and up to ₹30 Lakhs – 2%
• (b) Above ₹30 Lakhs and up to ₹1 Crore - 3%
• (c) Above ₹1 Crore - 6%

7. Expenditure on Foreign Travel (Air Fare & Foreign Exchange) (Travel abroad for the purpose of higher education or medical treatment is exempted in full)

• (a) Above ₹5 Lakhs and up to ₹10 Lakhs – 2%
• (b) Above ₹10 Lakhs and up to ₹25 Lakhs - 3%
• (c) Above ₹25 Lakhs - 5%

Note:

1. Expenditure Tax and Luxury Tax must be shared between the respective states and the centre in the ratio of 80:20.

2. All Toll Gates in the country must be removed in phases. To begin with, all the toll gates where the contract period has already expired for the particular stretch of the highway must be removed immediately.

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