A majority of employees surveyed expect Finance Minister Pranab Mukherjee to increase the income tax exemption limit to Rs 3 lakh in the upcoming Budget,in line with rising inflation,Assocham has said.
“Over 89 per cent of respondents said the slab of tax-free income has not moved up in line with the real inflation. Therefore,there is a need to increase the basic exemption limit to Rs 3 lakh,as it will spike up the purchasing power of individuals and stimulate demand,” the survey by Assocham said.
At present,the income tax exemption limit is Rs 1.80 lakh.
The chamber has surveyed about 500 employees,working in sectors like manufacturing,IT/ITeS,power and FMCG,from cities including Delhi,Mumbai,Kolkata,Chennai and Pune.
A hike in exemption limits will enhance people’s disposable incomes,which,in turn,will boost consumption spending as well as savings,the study said.
The headline inflation stood at 6.55 in January.