Assocham for raising exemption limit for income-tax

NEW DELHI: Assocham has asked the government to raise the threshold exemption limit of income-tax to Rs 1 lakh and reduce the maximum tax limit for partnership firms to 30 per cent besides bringing farmers owning farms and farmhouses beyond a prescribed acreage under the tax net.
In its pre-Budget memorandum, the chamber has suggested 10 per cent rate for income between Rs1lakh and Rs 3 lakh, 20 per cent for the Rs 3 - 5 lakh income slab and 30 per cent for income exceeding Rs 5 lakh, an Assocham statement said.
In accordance with its earlier assurance that I-T rate for partnership firms would not exceed the rate for individuals, the government should also reduce the maximum rate for partnership firms to 30 per cent as it has done in case of individuals.
Assocham said no attempt has been made to tax income of rich farmers who get benefits by way of reduced rates of electricity and water which other industries have to bear.
It also suggested that the actual expenditure incurred by employees on account of hospitalisation should not be taxed as perquisite in their hands but exempted on the basis of certificate from the concerned hospital.
The benefit of section 10(10C) should also be given to the employees who get their VRS package in instalments and the exemption limit be extended to Rs 10 lakh for overall benefit of the employees opting for VRS, it added.
Such provisions should be excluded from the purview of perquisite calculation in view of the considerable increase in record maintenance and better tax administration, it added.