Definitely the tax limit should be raised as the cost of living is getting high every year.when this limit (1 Lakh) was effective in that year what was the price of petrol and today what is the price, like-wise other commodities. As the cost of living is getting high so raising the tax limit will be wiser decision than reducing the tax rates as i think.
Let's take the example of a high profile official who earns a salary of 60,000/- plus pm. For an employee of this rank, rent is paid by company, conveyance is paid at actuals, mobile bill is taken care by the company, many a times they claim their food expenses under entertainment of guests. What has he got to spend if all these come from the company ? Will it in any way affect his life ? Where as a executive who earns 25,000 has to take care of all these expenses from his pocket and still pay the same percentage of tax ? Is it justified ?
Education loans should have longer term to repay like home loans. the interest rate also to be reduced. If parent is repaying the loan tax exemption should be allowed to him also. The upper limit of Rs. 25,000 is to be removed
I don't know whether Chidambaram will be reading this or not but the high tax is charged from the salried individuals but do we get those benefits similar to the peolpe from developed countries?
1. Is it justified to tax highest levels in world when you/your government is incapable of providing the basic infrastructure.
2. Is government providing any sort of medical help or social security in case of job loss or accident?
3. Is government spending enough on providing basic sanitation, potable water and electricity to everyone?
4. Is government bothered about taxing individuals owning big agricultural lands, shops, showrooms etc.?
5.Is government doing enough to stop tax evasions from high net individuals including their own bureaucrats and politicians?
6. I really fail to understand why only middle class people fell into their prey everytime there is a hike in tax or increase in indirect means of tax.
7. Has the government done anything to decrease the 7% rate of inflation? it is still rising high.
If this government is really bothered about salaried class, they should decrease the tax burdens on salaried individulas
The limit should be raised for men as well as women, to extent of Rs.2.00 lacs and reframe the slab accordingly. Everywhere service class/middle class is affected by government policies because they always abide by the government regulations in letter and spirit.It is very difficult to for a middle class family to live in by virtue of their class status and they are caught in between. Mr Chidambaram do something for the downtrodden people, if possible. Of course, we are already late, now that budget is ought to be out on 28th.
First of all there should be a better understanding of the word "TAX" to the law makers, law enforcers and also to the common people who are paying the tax. Some people may ask why should we pay tax. Yes, that is a valid question. But this is not an unanswerable question. The simple answer to this can be given by taking a simple example. We throw garbage in the dustbin everyday and a municipal van comes and collects it and dumps it in a place outside the city. We are not paying anything for this. Where did the money come from to hire those people, buy those vehicles and collecting the dumping yard, and to recycle the waste. All this money is coming from our taxes. We are paying the taxes and we are getting the services from the government in some form or the other. This is why we need to pay the taxes. Likewise there are many situations, in which we are not paying money for them. This can be compared to going to a coffee shop and having coffee and paying the bill. There we are paying for the product and service we get from the coffee vendor. The same can be applied to taxes also. Yes, there is an ill treatment in the tax valuation. There is a burden on the middle class person who is earning, saving less for his future and paying more to the government. Here the highly-earning people will not have a problem. Yes, you may ask why they don't have any problem? Let me explain. Compare a person who is earning 3 lacks per annum and a person who is earning 10 lacks per annum. Lets assume that both the families consist of 3 people. Now we will compare the expenses.
Nature of expense 3 lacks person 10 lacks person Rent 12*4000=48000 12*8000=96000 Traveling Expense 12*1500=18000 12*3000=36000 Household expense 12*3500=42000 12*3500=42000 8000 Medical 12*500=6000 12*500=6000 School Fees 12*1000=12000 12*1000=12000 Miscellaneous 12*3000=36000 12*5000=60000 Total 162000 260000
These are the expenses that they bear throughout the year. The expenses does not vary more than a lack rupees. According to the present tax scheme, the 3 lacks earning person will have to save some one lack rupees for him to rescue from the tax meanwhile saving less in his account. But in the case of 10 lacks earning person can save more or invest more in some property or something else to rescue his income from being taxed. And still he will be remained with much more bank balance than the 3 lacks earning person. There is absolutely no problem with this. But the problem lies in the tax free slabs and the tax free schemes. If the tax free income slab is increased some 20-30% percent of the people will go off the taxable income slab and they can save more which in turn will help the government in several ways. Again a question comes as %u201CThe government is losing the tax from them. Isn%u2019t it?%u201D Absolutely not. This is because, people will save the money in their bank accounts which in turn will be invested by the banks in form of loans or something else and the income of the banks will go up which in turn will make the banks pay more tax which is much more higher than the tax payable by the person who saved the money. If he saves the money in some government schemes such as NSC, PPF etc, the government will invest this money in FDI or FII and will get more returns. This is one reason why the government won%u2019t loose the tax. And one more is that saving the money by those people will enable them buy some vehicles or furniture or some thing else which in turn will be taxed both from the buyer and the seller. This is also one reason why the government won%u2019t loose the tax. And coming to tax saver schemes. The schemes like Mutual Funds and Shares (these are taken as an example), the schemes which will earn money to the middle people, that is the banks or investment advisors should be taken out from the tax saver schemes. This should be done because the income that is made by the investment advisors is not coming into the records and so only the schemes undertaken by the government should be used to save the tax.
Note: This is just my opinion and nothing to do with any of the policies that the government is following.
Taking into consideration the current inflation rate and also the fact that people should have some surplus to spend in the market, FM would do good if he adopts the below mention slabs for income tax: 1. Upto Rs. 200,000 - Nil 2. Rs. 200,001 - 300,000 - 10% 3. Rs. 300,001 - 500,000 - 15% 4. Rs. 500,001 and above - 25% 6. A 10% surchage on net tax should be imposed on those drawing Rs. 1,000,000/- or more. 7. Women should also be taxed at the same rate considering the equality phenomenon. In any case working women add to the family income and hence no special consideration need be given to them (it is assumed that in most cases husbands are also working and drawing handsome salaries). 8. Those senior citizen who are dependent on pension and interests or dividents only should be exempted from income tax regardless their income which is in any case is not very subtantial. This should also need be considered from the point of view that they have already paid enough tax and that they should not be burdened with income tax in the last phase of their lives. 9. Senior Citizens who are still working or those have superannuated from govt/PSU jobs and are working in private sector drawing handsome salaries, need to be taxed at 50% of IT rates as mostly they are without any responsibility and have excess money than their requirement. Further more they continue to block the jobs for others till they die. No consideration need to be given to such junks.
Income tax rates should be rationalised as follows:
0-2 lakh - nil
2.1-3.0 lakh - 5%
3.1-5.0 lakh - 15%
5.1 and above - 25%
Govt. employees having no other income should be exempt from filing return,it will reduce the work load of the Income Tax Authorities and lead to saving in valuable office space and also reduce the problem of maintenace of office records. It is very easy for any ITO to find out if any of the govt. employees is having income disproportionate to his/her income.
Many of us women step out of the house to earn a living and thereby reduce the burden of running the house on a single salary. Tax exemption limit for women must be increased from the existing 1,35,000/- to atleast 1,75,000/-. This would be of great help to women in particular.
RE:Analysis on Tax - Suggestion
by Ramdas Nayak on Feb 19, 2007 05:04 PM Permalink
Let the exemption restricted to unmarried, widows, divorced women only not to those who use their salary to buy fashinable clothes, visit beauty parlours,arrange kitty parties and live on their spouse salary.
RE:RE:Analysis on Tax - Suggestion
by on Feb 20, 2007 10:42 AM Permalink
Ramdas, u seems to have a grudge against women who work. Y don't u ask ur wife to work or are u one of those MCP's who want her at home to bring you tea, take of ur shoes press ur aching feet or something like that. ha
