|Thursday, February 17, 2000,
Income tax: some suggestions
AS the first budget of the new millennium is going to be presented on February 29, I have the following suggestions to make in this regard:
1. Rates of income tax for individuals and HUFs should be revised as follows:
(i) Up to Rs 70,000 nil.
(ii) Above Rs 70,000 but not exceeding Rs 1 lakh 10 per cent.
(iii) Above Rs 1 lakh but not exceeding Rs 2 lakh 20 per cent.
(iv) Above Rs 2 lakh 30 per cent.
|2. Standard deduction u/s 16(i): an
assessee whose income from salary before the standard
deduction does not exceed Rs 5,00,000 one-third of
the salary or Rs 30,000 whichever is less.
If it exceeds Rs 5,00,000 nil
3. The surcharge at the rate of 10 per cent which was introduced for the assessment year 2000-2001 should be abolished.
4. The deduction in respect of deposits under the National Savings Scheme, Sec. 80 CCA, which was Rs 40,000 for the previous years, 1990-91 and 1991-92, and which was discontinued from the assessment year 1993-94 should be reintroduced with the maximum saving limit of Rs 20,000.
It will bring relief to the tax-payers whose income has increased due to the upward revision of pay scales. As compared to Section 88, assessees are left with fewer schemes under Section 80 where the assessees can divert their investments. Savings under the NSS, Sec 80 CCA, will also provide long-term finances to the government if the lock-up period is raised to six years
5. The deduction in respect of interest on securities, dividends, etc, u/s 80-L, should be raised to Rs 20,000.
6. Rebate u/s 88: The qualifying amount for getting deduction from income tax u/s 88 should be raised from the present Rs 60,000 to Rs 80,000. If the assessee subscribes to an eligible issue of capital or units of mutual funds, the qualifying amount of savings should be raised to Rs 1,00,000.
The repayment of a loan taken for purposes of purchase or construction of a new house should be raised from the present Rs 10,000 to Rs 20,000. It will not have any extra burden as it continues to form a part of the maximum saving limit of Rs 80,000. The overall rebate under Section 88 will thus be Rs 16,000 (20 per cent of Rs 80,000) or Rs 20,000 (20 per cent of Rs 1,00,000) if the amount is invested in eligible securities.
7. In the case of all assessees, in addition to tax on profits, all the normal rates as prescribed in the Income Tax Act, they should be charged tax on the fair market value of their investments in fixed assets (land and buildings, plants and machinery, furniture and fittings) and stock-in-trade at the rates given below:
Where the investment in these assets exceeds Rs 5 lakh but does not exceed Rs 10 lakh at 1 per cent.
Exceeds Rs 10 lakh but does not exceed Rs 1 crore at 0.5 per cent.
Exceeds Rs 1 crore but does not exceed Rs 10 crore at 0.25 per cent.
Exceeds Rs 10 crore at 0.10 per cent.
Woes of the middle class
It is shocking to know that even Class IV employees working in nationalised banks, state and Central Government offices and other government undertakings have to pay income tax whereas the reality is that they find it difficult to make both ends meet. Living, indeed, is difficult for them.
Living is difficult even for the middle class people who have to keep up the pretence of a comfortable life.
It is, therefore, hoped that the Union Finance Minister, will raise the exemption limit at least to Rs 80,000. The limit of the savings for the purpose of income tax should be enhanced to Rs 1 lakh, and Rs 40,000 should be permitted as standard deduction.
In addition to these concessions, the surcharge on the tax payable should be abolished in the case of those people whose income is less than Rs 3.50 lakh in a financial year. For on the income between Rs 1 lakh and Rs 3 lakh the income tax rate should be 20 per cent.
B. M. SINGH
PU: row over retirement
A lot of dust is being raised on the issue of enhancement of the retirement age of employees. The whole issue is in haze. Let the Panjab University authorities clarify certain things for the consumption of the people concerned and others so that uncertainty is removed from the mind of everybody.
Has the extension in the retirement age been cleared finally by all the authorities? Is it meant only for the university teachers, or also for the teachers of the affiliated colleges as well? What is the position of the principals of these colleges? Are they to be treated as part of the non-teaching staff which technically and logically they are?
With what stretch of the imagination are the Registrar, the Controller of Examinations and the Finance and Development Officer treated as teachers in the matter of enhancement of the retirement age? If they are to be treated as teachers, then all non-teaching employees should have the same privilege. Whereas the Sports Department is considered as a non-teaching department, its chairman is relieved on attaining the age of 60 years.
|| Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Editorial |
| Business | Sport | World | Mailbag | Chandigarh Tribune | In Spotlight |
50 years of Independence | Tercentenary Celebrations |
| 119 Years of Trust | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail |