Presently there are many provisions in Income Tax Act where some monetary limits are fixed e.g. exemption limit for income up to INR 250000 or limit for investment U/s 80C INR 150000 etc. These limits remains unchanged for years or are changed after few years at the discretion of Finance Minister which does not cover even the impact of inflation on earlier limits.

Every years all Tax payers especially individuals wait for the Annual Union Budget for some increase in such limits but most of the time disappointed.

As such it is desirable that all such capping or limits should be linked with price index so that these are automatically changed based on price index. Any increase over & above such price index linked limit will be the actual increase which FM may declare. This will be similar to calculating cost linked with cost inflation index for the purpose of calculating long term capital gain.