Budget 2014: CII Bats for More Tax Deductions

The Confederation of Indian Industry (CII) in its pre-budget wish list has called for more tax deductions on home loans as well as medical expenses.

Under Section 24 of the Income Tax Act, "interest on housing loans should be increased to Rs 5 lakh", the industry body said. The existing limit is Rs 1.5 lakh.

With regard to the deduction for health insurance premium, the industry body suggested that the limit should be raised to Rs. 50,000 from Rs. 15,000.

"Increase the existing limit of Rs 5,000 to Rs 15,000 for preventive health check-ups. Tax deduction provided for preventive health check-ups should be over and above health insurance premium," it said.

Amid weakening consumer sentiments in the face of economic slowdown and high inflation, personal income tax slabs need to be increased, CII said.

The country's seeing its worst slowdown in 25 years after its economy grew at sub-5 per cent for the second year in a row, in the fiscal ended March 2014.

"To encourage the ailing corporate sector affected by economic slowdown, the effective corporate tax rate inclusive of surcharge, cess and other levies should be lowered to 25 per cent," CII said.

Currently, the corporate tax rate inclusive of surcharge is 35 per cent for companies with a net income of more than Rs 1 crore. For net income below Rs 1 crore it is 32 per cent.