Nagpur: J. P. Sharma, president of Vidarbha Taxpayers Association (VTA) has requested Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley to extend threshold limit of income tax to Rs. 5 lakh, in to be announced finance budget for the year 2016-17, which will remove countries financial crises and shall also result is central government achieving it’s target of affordable homes till 2022.
Sharma said, threshold limit being set at Rs.5 lakh, majority of taxpayers will start showing their income above Rs.5 lakh and this will help them in obtaining home loans up to Rs.30 lakh. Although by doing this, direct tax revenue will fall by around Rs.25 crore; however taxpayers will be benefited by Rs.5-15 thousand each. Thereby banks will be able release funds in home loan sector, which is presently lying idle with banks.
J. P. Sharma also suggested that tax slab of 10% should be raised up to Rs.10 Lac above basic exemption limit, 20% above Rs.10 lakh to Rs. 20 lakh and 30% above Rs.20 lakh up to Rs.5 Crore. He further suggested another slab of 35% should be introduced to target very high income sector of above Rs.5 Crore.
“Home for All” scheme of the Central Government should be more realistic, whereby taxpayers buying first home should get home loan from bank at subsidized rate between 7.5 to 8 percent per annum. Already more than 10 lakh tenements made by government agencies are lying vacant in the country, there are no buyers; hence loan upto Rs.5 lakh should be interest free and thereafter up to Rs.50 lakh the rate of interest should be 7.5% only. This will remove economic backlog of the country and current financial crises will also be eliminated.