The Hindu : No actual benefit

Online edition of India's National Newspaper
Friday, Mar 07, 2003

Opinion

Opinion - Letters to the Editor

No actual benefit

Sir, — The Finance Minister has `generously' raised the standard deduction to 40 per cent of the total gross income without raising the ceiling of Rs. 30,000. A critical analysis of income tax computations for the incomes ranging between Rs.75,000 and 90,000 per annum reveals that there is no actual benefit whatsoever to those who come under this bracket, if one takes into account the minimum PF contribution. It is clear that this modification does not bring any cheer to assessees whose income is less than Rs. 3 lakhs. However, the new proposal shall benefit assessee with an annual income exceeding Rs. 3 lakhs and those with annual income over Rs. 5 lakhs.

Considering the fact that the abolition of tax on long-term capital gains and the lowering of excise on gold and diamond come with levying excise/cess on commodities like diesel, petrol and urea, it appears that the government does not bother about the welfare of the people at the lower strata.

G. Govindarajan
Mannargudi, T.N.

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