The Hindu : `The sting is in the tail'

Online edition of India's National Newspaper
Saturday, Mar 02, 2002

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`The sting is in the tail'

By Our Special Correspondent

NEW DELHI MARCH 1. For the salaried class, the sting was in the tail of the Union Finance Minister, Yashwant Sinha's budget for 2002-03.

At the fag end of his presentation, Mr. Sinha had practically finished with his taxation proposals and was talking about a scheme called `Sampark' which would enable income tax payers to obtain information and forms through the internet. User-friendly software would be made available by the Income Tax Department to enable taxpayers to prepare their returns of income, he said. Then came some comments about permanent account number (PAN) where the Finance Minister proposed a penalty of Rs. 10,000 in all cases where a false PAN is quoted in documents related to specified transactions.

It was then that the five per cent surcharge on income tax came in. Turning to the Speaker, G.M.C. Balayogi, the Finance Minister said "Sir, I have already stated that national security is an overriding concern. Its cost has to be shared by all of us. I, therefore propose to impose a modest surcharge of five per cent across-the-board on all categories of taxpayers, except individuals and Hindu undivided families having a total income up to Rs. 60,000. The two per cent surcharge imposed last year in the wake of the Gujarat earthquake is being abolished and hence the net additional impact would be only three per cent. I also propose to restrict the 100 per cent deduction of export profits allowed to certain units under Sections 10A and 10B of the Income Tax Act to a 90 per cent deduction for the assessment year 2003-04.''

Continuing, he added "To sum up, Sir, my proposals made in this budget on the direct taxes will result in a revenue gain of Rs. 6,000 crores, including the component of surcharge of Rs. 2,750 crores. I estimate that the direct tax revenue in 2002-03 would be Rs. 91,585 crores. Mr. Speaker Sir, with these proposals I estimated total tax revenue receipts for the Centre at Rs. 1,72,965 crores and the fiscal deficit at Rs. 1,35,524 crores or 5.3 per cent of the GDP.''

With the surcharge coming at the end of a long list of burdens already imposed on the general public, there were long faces in Parliament, particularly in the Treasury Benches. There was little applause when Mr. Sinha finished his speech a little later and it was only one or two Cabinet colleagues who shook hands with Mr. Sinha. The scene last year was a total contrast, when the Finance Minister was roundly applauded for his budget presentation and even some Opposition members were seen walking up and congratulating him.

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