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Spare soft targets

In a young nation, the aged suffer. Young India?s growth story has been built on the back of the efforts of the preceding generation.

india Updated: Jun 16, 2006 01:41 IST

In a young nation, the aged suffer. Young India’s growth story has been built on the back of the efforts of the preceding generation. But the absence of any form of social security, coupled with rapid urbanisation and a growing trend towards nuclear families, has left them to fend largely for themselves. The government’s decision to deduct tax at source, that too with retrospective effect, on a major source of income for many senior citizens — the interest earned from fixed deposits with banks and post offices under alleged ‘senior citizens schemes’ — is, therefore, a cruel blow. It also flies in the face of the UPA’s claim that senior citizens are its ‘natural constituency’.

The taxmen’s contention — that such earnings were not exempt from tax anyway, and hence should have been taxed at source from the start — also doesn’t hold much water. Tax deduction at source is a tool utilised by an inefficient and leaky tax administration system to paper over its own shortcomings. For senior citizens, most of whom, in any case, don’t fall in the taxable category, it is simply an additional source of harassment and worry. Instead of a one-time filing of an exemption form, they will now have to file returns and wait for the bureaucracy’s creaky mill to grind out their paltry refunds. In many cases, this will mean a real cut in their capacity to meet everyday needs, since they do not have alternate income streams to depend on. Poor reward indeed for a lifetime’s labour.

Science fiction writer Isaac Asimov had extensively analysed taxation as one of the basic principles of ‘psychohistory’, his fictional construct of mankind’s future in the epic sci-fi saga, the ‘Foundation’ series. He observed that over time taxation systems inevitably became more complex as competing interests pressured governments into adapting the tax system for their purposes and politicians dispensed tax breaks as rewards to their supporters. He predicted periodic clean-ups but also noted that the more complicated the system had become, the more difficult and even damaging the simplification. Recent developments are proving him uncannily and unfortunately right.