Respected Finance Minister Sir, as a salaried employee, I voice the feeling of all the salaried in India. The one pain that we all face is because of the feeling that we are the highest taxed people of the country as all our income is transparent and the tax is almost always deducted at source.
Tax Slabs
Sir, my first request is to increase the tax slabs significantly. The current entry level slab and the gap between the higher levels are too low. Today a carpenter or electrician asks for Rs.750 a day as minimum wage. This means that he will make Rs.15,000/- even if he works for 20 days in a month. He goes without taxes or TDS. On the other hand if a salaried person touches the Rs.1.8 lakhs per annum slab he is taxed on his income.
Please increase the initial slab for income tax to Rs.5 lakhs. Make it atleast Rs. 3 lakhs. Also let the higher slabs have significant gap between them. As history has proven earlier, the less pain there is to pay taxes; more people will voluntarily pay their taxes. This in turn will lead to higher revenues to the Government.
The creation of a separate slab for Super Senior Citizens is highly appreciable. My grandfather has benefitted from this slab.
Tax Saving Investments
Sir, the last two years we had the support of Infrastructure Bonds apart from the Section 80C options to reduce taxes. Please consider to increase the volume of investments qualifying for the tax benefits. The Rs.1 lakh limit for tax savings is archaic and was one that you had implemented almost 10 years ago. Now that you are in power again, please make the investment quantity relevant for the current times. An increase upto Rs. 3 lakhs under section 80C and Rs.3 lakhs again for housing loan interest will be appreciable.
Please do not think that I am asking for these jumps in the tax benefits slabs out of greed. I am only bringing to your notice the current reality of high costs. Even if we buy a house with 2 bedrooms and 850 square feet of usable space (1000 square feet is what my builder bills us for), we have to spend about Rs.30 lakhs. If we take a loan for Rs.25 lakhs, we will be higher than the current Rs.1.5 lakhs slab for the housing loan interest benefit.
Service Tax for Construction
Though it is true that more and more service need to be brought under the tax net, the service tax on house construction has hit us hard. Some of us prefer to go with quality and long standing builders. Only these builders charge the service tax. Many new comers and fly-by-night builders do not charge this and show attractive rates for innocent buyers.
The other aspect of this is that the ultimate cost for us to buy houses has gone up significantly. As end users, we cannot pass this burden on to others too. Please consider removing the service tax on house construction.
Taxing Pension Plans
Sir, please consider liberal treatment for a few other avenues for tax savings. Currently the tax free commutation for pension funds is very low at one-third. The plans as of now are highly unattractive due to this.
Please make this amount fully tax free on withdrawal. This will prompt more of us in private employment to opt for contributory pension schemes like the New Pension Scheme and pension plans from private life insurance companies.
Expenses as Deduction
Sir, similar to businesspeople, please consider a few necessary expenses for the salaried such as mobile phone bills and actual office commuting cost (fuel, vehicle maintenance expenses, bus/train fare) as deductable expenses for the salaried. Cost of buying mobile phone and laptops and 3G data card may also be made deductable from income. In this modern work environment, all these gadgets have become necessary for the salaried employees.
A letter which can make millions of citizens happy, as it will lead yo having more money at hand, and alsohelp in better planning.
Andhe ke aage Roya.. Apne Nai khoya….
: Crying in front of a blind person is like loosing your own eyes.
Make effort to increase your income. Govt of India is to suck the hard earn money of a salaried person and pass the benefits to big pocket investors and politicians.
They have nothing todo with a common man problem.
SO VOTE INDIA VOTE.
Good Letter. But seems to be too optimistic in the present scenario of the global economy.
Very very realstic view, but sad that the Goverment does not listen to the salaried class or the Middle calss.
Its us who are highly taxed inspite of being the major contributors towards the country's tax revenue. The Lower class does not fall under the Tax bracket the Rich class can hire the services of an accountant to come out with different ways of evading tax. It is not only the carpenter but also a Rickshaw driver makes anywhere between 800-1200 a day, and even if he works 6 days in a week he would earn anywhere between 20000/- to 30000/- a month, but is TDS applicable to him? No is the answer. Sad state for a persoon belonging to the Middle class.
A very valid submission.
But what is the point? FM has turned deaf year. Figs in few thousands/ lacs do not impress the Govt/ FM. They are used to Crores and G s!! Common salaried employee is nothing to them. Als!!
Sir, the Gentleman who has written this letter has truly reflected an ordinary salaried man's anguish. Because of road congestion, he has to have a motorised vehicle, for which petrol is ever increasing in price. Medical bills are on the rise, house rents are soaring and to construct a house with a person's 2 lakh annual income, how is it possible. If you take stock of the number of persons coming under 2 lakh to 5 lakh bracket are more than any other category. Therefore, liberal consideration and relaxation of tax targets is necessary. But I am sure that these letters and similar requests will reach only a deaf ear.!
Most unimaginative Budget 2012-13 is presented by the FM. It is for Gandhi Family and not for aam admi. Increas of excise duties and service tax & taxing several services- including burial related services – will, leading to more costlier goods and services, hit the aam admi right and left. The FM didn't think of increasing employment opportunities for the swelling educated unemployed youth of the country. He should have taken steps to bring billions of black money statshed outside the country to bring down the fiscal deficit instead of making lives of aam admi more miserable. Of course, he is a Politician truly protecting the vast majority of corrupt politicians!!
I am fully agree with the contents of the letter , addressed to the Hon'blle Finanance Minister and would like to request the Finance Minister to consider the representation submitted on behalf of Saried people.
Yours faithfully
pk.goswami