If there is one group of people I feel very strongly for, then it is the middle-class. If you are to take this segment of taxpayers, I have consistently given some relief in some form or the other within the limits of my affordability in each budget. And the reason is as far as businesses and professionals are concerned, they have avenues for controlling their expenditure. The compliance level also raises a question mark. Salaried people constitute a bulk of people in the society and these are the honest taxpayers of the country. The system needs to come to their rescue.
In my first year, I raised the tax exemption limit from Rs 2 lakh to Rs 2.5 lakh. I raised the Section 80C limit from Rs 1 lakh to Rs 1.5 lakh. I raised the housing loan limit deduction from Rs 1.5 to Rs 2 lakh. The next year I raised transport allowance from Rs 800 to Rs 1,600. Then for every professional earning up to Rs 5 lakh, which is 90 per cent, don’t maintain books, 50 per cent presumptive income… Last year, the smallest category taxpayers had their rates reduced to half from 10 per cent to 5 per cent. In every year’s budget Rs 8,000- 10,000 crore relief has been given to the middle class.
This year, even though my affordability and fiscal debt are very tight, I have given Rs 8,000 crore relief in terms of standard deduction to the salaried class. There are 2.5 crore taxpayers who are benefitting from this. To the pensioners and senior citizens, I increased their avenues of investment. The first 50,000 rupees that they get will be exempted. Rs 50,000 will be medical expenses. Hospital bill of Rs 1 lakh will be tax exempted. That’s another Rs 4,000 crore. Even in this year’s budget I am spending on this class about Rs 12,000 crore, which is probably a little more than what would be spent on the health insurance scheme.