It is heard that Congress government is planning to scrap tax exemptions on various policies like LIC, NSC, HRA, Mutual Funds & Other section 80C benefits (Exemptions Upto 1 lakh).
What can Happen ( This scenario is for Salaried Employees ):
– You cannot get tax exemtions on your HRA, i.e. No business of showing House rent agreement & receipts. You will be taxed on the whole HRA.
– You cannot claim tax exemptions by showing LIC Polocies or by having NSC Bonds.
– You wouldnt’ be able to get tax exemtions on Housing loans.
– No Tax benefits on Mutual/Infrastructure bonds
What does government wants us to do:
This is in discussion and government wants people to provide their feedback on these future decisions and will thereby decide by the number of feedbacks received.
** Your feedback is important and will decide how much of our Hard earned money is going to government. ** Please write a short email any one of these guys stating whether you want goverment to continue or discard these exsisting policies by 5th July 2006.
Ms. Anita Kapur, Joint Secretary, TPL-I, Room No. 147-B/I, North Block, New Delhi.
e-mail: firstname.lastname@example.org (mailto:email@example.com) or
Ms. Monica Bhatia, Director, TPL-I, Room No. 147-D, North Block, New Delhi.
e-mail: firstname.lastname@example.org (mailto:email@example.com) or
Ms. Pragya S. Saxena, Director, TPL-II, Room No. 147-E, North Block, New Delhi.
e-mail: firstname.lastname@example.org (mailto:email@example.com)
IT is also displayed in the running messages in the Incometax department of india website http://incometaxindia.gov.in
But they are not gonna scrap entire benefits. Some of the benefits could disappear for salaries if they revise and cancel out exemptions. But they make a major change then most of the money won’t get invested and because of that, lot other things would get affected. Sure that FM would have alternate for it.
Economic Times posted discussion on this matter. Participate in http://o3.indiatimes.com/et_blog/archive/2006/05/17/689726.aspx