Tax proposals announced by Union Finance Minister P Chidambaram in the Budget 2013-14 have not been welcomed by most taxpayers.
A retired public-sector company manager Prahlad Wahi disliked the tax proposals, pointing out that the finance minister neither hiked fundamental basic exemption limit nor hiked the tax saving limit under Section 80C.
In the Budget 2013-13, the basic exemption for senior citizens had been hiked by Rs 10,000 to Rs 2.5 lakh. In addition, that Budget had also offered all taxpayers extra exemption of Rs 10,000 for savings bank interest.
But no change has been made in the exemption limit this year, despite the fact that inflation jumped 8.5 per cent in the past 12 months.
Mr. Chidambaram proposed a tax credit of Rs 2,000 for people with annual income of less than Rs 5 lakh. It means a person with an annual income of less than Rs 5 lakh will be liable to pay Rs 2,000 less than what he/she was previously liable to pay in tax.
But, a school teacher from Noida said the tax credit announced by the finance minister was pitifully small. She said that the tax credit would not make any considerable difference to tax liability.
Criticizing the tax credit, the school teacher said, "It will reduce my tax by barely Rs 172 per month, provided my income does not go beyond Rs 5 lakh in the coming year."
Many other taxpayers also criticized the Budget for bring no change in the home loan exemption limit. The Rs 1.5 lakh exemption on home loan interest was fixed more than a decade ago in 1999.