Budget 2022: Taxing time for common folks but big bonanza for politicians; here's how to correct this anomaly

-

A measly Rs 1.50 lakh is what one gets by way of deduction from taxable income towards savings and investments. And this has been caught in a time warp — no upward revision in the last decade or so whereas ideally it should be revised upwards every year in recognition of the erosion in the value of money. Its one-size-fits-all character is even more questionable. If under progressive system of taxation, the rates should go up with one’s income, then equally the avenue for tax-oriented savings should also be resilient to accommodate their greater savings urges and capacity.

It is not as if such loosening of purse strings would make a dent in the revenue of the exchequer given the fact that most saving/investment schemes under Section 80C are either flowing into governmental coffers or for capital formation like tuition fee for children and roof under one’s head. It is duplicitous to allow Rs 2 lakh towards set off of losses from self-occupied houses emanating from the interest component of the EMI, while being niggardly towards the principal component which is the upshot when it is jostled out by one’s contribution to provident fund.

The government should be indifferent between taxes and such cheap funds garnered for nation-building. Thus, the present scheme can be tweaked as follows:

On the first Rs 2 lakh of savings, 100 percent deduction from the gross total income;

On the next Rs 2 lakh of savings, 90 percent deduction;

On the next Rs 2 lakh of savings, 80 percent deduction and so on till the 50 percent deduction mark is reached. It would be apparent that for savings in excess of Rs 2 lakh, a progressive price is exacted from the individual in the form of less and less deduction at each successive stage which he should not mind because at the end of the day the money blocked in various schemes becomes available to them whereas tax is perceived to be going down the drain.

And the section should be broad-based. One finds the scheme singularly devoid of any attraction for senior citizens who have already hung their boots. They obviously won’t be contributing to their provident fund. Their children would be out of schools and colleges and therefore cannot claim tuition fees either. It is not the stage of their life when they would buy or construct a house and take the resultant burden of EMI. What they need is an avenue tailor-made for them. It is the time of their lives when most of them are constrained to pop blood pressure or diabetes pills, besides paying consultation fees to their doctors. None of these qualify for deduction. Section 80D giving tax benefits for health insurance premium doesn’t help them because health insurance policies in India are fixated on hospitalisation.

Tuition fees that qualify are those in respect of a maximum of two children of the taxpayer. Why should we view education so restrictively? A grandparent may come forward to educate his grandchildren especially when his son or daughter is facing financial difficulties. It is common for good Samaritans to educate the children of their domestic help. Such altruistic spending should be encouraged with a tax break.

Section 80GGC of the Income Tax Act confers a magnanimous, hackle-raising and eye-popping 100 percent deduction without any let or hindrance for contributions to political parties or electoral trusts made through banking channels. And this obnoxious dispensation has been allowed to continue despite knowing its dubious potential — money laundering. And there is a conspiracy of silence among political parties. How can Parliament be so tight-fisted when it comes to a laudable cause (80C) and be so unabashedly generous to donations to political parties?

The patent inequity would be even more glaring if one juxtaposes the no-holds-barred leg up to donations to political parties with deduction for donations to altruistic causes under Section 80G — only 50 percent of such donations are normally tax-deductible.

The author is a senior columnist. Views expressed are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.



from Firstpost India Latest News https://ift.tt/3tMScHC
S Murlidharan

Comments

Post a Comment

Popular posts from this blog

Both COVID-19 vaccine doses needed for good protection against B16172 variant

-
It’s been a concerning few weeks in the UK, with the B16172 variant first taking hold and then spreading to become dominant. This more infectious form of the virus, initially identified in India, is what we’re now going to have to live with – unless it is out-competed by another variant in the future. Worryingly, experts had predicted that B16172 might be able to escape some of the effects of vaccines, which if true would threaten to derail the UK’s plans to finish lifting restrictions from the end of June. However, Public Health England (PHE) has looked at the ability of various variants to evade immunity and says that the UK’s vaccines remain effective against the variants circulating, including B16172. On the surface, this looks like good news. But delve a bit deeper, and things get more complicated, says Paul Hunter, professor of medicine at the University of East Anglia. PHE’s research found a little drop-off in protection against B16172 among people who were fully vaccinated.
Read more

New coronavirus variant emerge in India: How should our COVID response change?

-
Image
After genome sequencing of over 10,000 COVID-19 cases in India, researchers have discovered a new variant with two new mutations which may be better at evading the immune system. In 15-20 percent of samples from the Indian state of Maharashtra (the state accounting for 62 percent of cases in the country) a new, double mutation in key areas of the virus has been detected. These are now known as the E484Q and L452R mutations. What makes the variant different? Both these mutations are concerning because they are located in a key portion of the virus – the spike protein – that it uses to penetrate human cells. Spike proteins attach via a “receptor binding domain”, meaning the virus can attach to receptors in our cells. These new mutations include changes to the spike protein that make it a “better fit” for human cells. This means the virus can gain entry more easily and multiply faster. Given what we have seen with other similar mutations , it might also make it harder for our immu
Read more

120 flights delayed, 30 trains running late; Delhi fog & cold wave continue to give shiver to travellers

-
Arrival and departure of 120 flights, both domestic and international, to Delhi airport were affected due to dense fog and cold wave conditions on Wednesday, according to Delhi Airport FIDS (Flight Information Display System). As per the Delhi Airport FIDS, a total of 53 flights, including 21 domestic arrivals, 16 domestic departures, 13 international departures and three international arrivals scheduled are cancelled and not operating due to fog and other operational reasons from and to Indira Gandhi International (IGI) Airport in the national capital on 17 January. #WATCH | Delhi: Several flight operations delayed at IGI airport due to low visibility amid fog. pic.twitter.com/hG1DUKllEt — ANI (@ANI) January 17, 2024 Visuals from the Delhi airport showed passengers waiting outside, checking update of their scheduled flights. There were also some people waiting for flight of their families, friends and loved ones to arrive, which got delayed due to fog. #WATCH | Delhi | Pas
Read more