Raise Personal Income Tax Exemption to 3 Lakhs; Reduce Excise and Service Tax to 8% - ASSOCHAM
THE pre-budget memorandum for 2013-14 released by ASSOCHAM wants
1. Personal Income tax exemption limit to be raised to Rs. 3 Lakhs.
2. Excise Duty and Service Tax rate to be reduced from 12% to 8%.
3. Deduction of interest on housing loan to be increased to Rs. 5 Lakhs.
4. Effective rate of corporate tax to be brought down to 25% from 32.45%
5. Surcharge and Education Cess to be scrapped.
6. Customs Duty Rates to be increased.
Justification: The ASSOCHAM justifies its demands on the following grounds:
1. The base exemption limit of resident individual below the age of 60 years should be increased to Rs 3 lakh, to incentivize people to come into the tax net, ensure higher collection from greater compliance and encourage consumption and savings.
2. The excise duty and service tax rates were increased in the last two Union Budgets from 8 per cent to 12 per cent. Meanwhile the industrial growth has significantly fallen and due to low capital investment and high inflation, the demand for indigenous goods and services has been affected adversely.
3. At present, the limit of deduction of interest on housing loan is Rs 1.50 lakh per annum. This should be increased to Rs 5 lakh to boost the housing sector as also give relief to middle class families.
4. With a view to have a level playing field and removal of such levies in the proposed Direct Tax Code (DTC), the additional levy of tax by way of surcharge and education cesses should be removed on corporate assesses and similarly education cess on non-corporate assesses. The surcharges, including the education cess were levied as a temporary measure.
5. Government can selectively increase customs duty rates to neutralize the effect of lower tax rate of excise duty and service tax. Besides, by increasing customs rates, the government should protect the domestic industry from unfair competition from countries like China.