The increase in the inflation rate and bringing so many items under the fold of service tax has costed the common man too much. The middle and lower income groups are the persons affected very much. The situation worsens in case of middle income group as they come under the fold of Income Tax.The Government which has the responsibility of providing infrastructure facilities and other amenities cannot afford to miss revenue by way of income tax. Hence, there is no justification in either of the proposals - to raise the income tax exemption of income tax limits or to reduce the income tax rate. On the other hand some corrective measures could be undertaken. 1. To abolish the educataion cess 2. To raise the limit fixed on savings/investments under Section 80C from Rs.100000/[ to Rs.150000/- 3. To discontinue the relaxation in tax exemption limit to women residents of India below the age of 65 years and they shall be brought on par with men with exemption upto Rs. 100000/-4. To increase the exemption limit on Interest from the existing Rs. 5000/- to Rs.15000/- 5. To boost the savings the limitations on certain savings like NSC and Bank Fixed Deposits the proceeds on maturity being taxed be removed. R U Mahale Mysore India
