Budget 2015-16: Raise tax exemption limit to Rs 5 lakh, says MyCFO's Deepak Narayanan

Deepak Narayanan, Cofounder MyCFO

Personal Tax:

1. Raise Income tax exemption from Rs 2.5 Lakh to Rs 5 Lakh. Make it Rs 10 Lakh for Senior Citizens (There is no system of social security in India. Raising the limits will allow pension & interest earning senior citizens to set aside funds for medical & investments).

2. Increase exemption on interest from housing loan from Rs 2 Lakh to Rs 3 Lakh.

3. Exempt people from filing returns whose Gross Total income from salaries is less than Rs 5 Lakh (reduction in administrative burden).

4. Link all accounts (Bank, Income Tax, PF, Demat etc) of an individual to a common number (Aadhar or Citizenship no or equivalent). Helps the government to track antecedents of individuals, helps it to extend welfare schemes efficiently, improve compliances and tax collections.

Corporate Reforms:

1. Set up a portal which will improve governance relating to registration of new companies. The portal will provide steps for registration (Service Tax for instance), documents required for each type of Industry type (Software for instance) & tentative timelines for each of the procedures.

The clearance will be given by a 'nodal agency' which will act as a single window of clearance and will act as a co-ordination agencies between all departments concerned. This will improve transparency & cut corruption. Will go a long way in improving India's ranking in 'doing business'.

2. Businesses up to a certain turnover limit (say INR 5 Crore for instance) will be exempt from payment of Income tax and also exempt from filing tax and statutory returns. This will allow them to focus on business which is paramount especially in the earlier stages of an enterprise.

3. Companies that fail to take off should be given the option to exit easily.

4. Mechanism to link the business and the entrepreneur with a common number (Passport or aadhar) which can then track the entrepreneurs antecedents, link the returns, payments made to statutory authorities over the lifetime of the enterprise. This will once gain improve governance standards and levels of transparency.