Standard deduction, which was available to the salaried individuals on their taxable income, was abolished with effect from the assessment year 2006-07. Chambers of commerce have suggested reintroduction of the standard deduction for salaried employees of at least Rs. 1 lakh.
The minimum exemption limit may be increased from the current level of Rs. 2.5 lakh to Rs. 3 lakh per annum.
It is recommended that the exemption limit on medical expenses should be raised to at least Rs. 50,000 per annum.
To encourage savings under various instruments mentioned therein like PPF, tax-saving FDs etc., the limit can be increased to Rs.2 lakh.
The government should also include many other cities in the category of higher exemptions for HRA in cities like, Bengaluru, Hyderabad, Pune, Ahmedabad, Jaipur, Noida, Gurgaon etc,.
