BJP against lifting tax sops on savings, agri-income
BJP rejected the proposal to lift tax sops on savings, housing loans and agri-income saying it was against interest of vulnerable sections of society.business Updated: Feb 18, 2003 15:00 IST
Bharatiya Janata Party on Tuesday rejected the Kelkar panel proposal for lifting tax sops on savings, housing loans and agricultural income saying that it was against the interest of vulnerable sections of society.
"I made a simple request to the Finance Minister. There is a need for increasing revenue, as without it there can be no rise in expenditure. But the interest of vulnerable section of the society have to be kept in mind," BJP President M Venkaiah Naidu, who submitted the party's views to Finance Minister Jaswant Singh on Monday, told reporters on Tuesday.
The Rajnath Singh committee, appointed by the BJP to look into the suggestions of the task forces on direct and indirect taxes headed by Vijay Kelkar, opposed the abolition of tax rebates on savings as provided under Section 88, 80L and 10 of Income Tax Act.
The BJP was also against the removal of deduction in respect of interest on housing loans now at Rs 1.5 lakh, especially at a time when government has set a target of building one crore housing units in five years.
The Rajnath Singh committee also rejected the withdrawal of tax exemptions on education loans now available under Section 80E and on medical expenses under Section 80DDB.
The report, prepared after detailed discussion with party members across the country, also said the exemptions to small scale sector and cooperatives should continue.
"BJP felt that tax policy should target at economic growth, social justice, employment generation and balanced growth between different region and judicious allocation of resources," Naidu said.
However, the Party said it "does not support tax evasion by the non-farmers showing their income from predominantly non-farm activities as farm income."
BJP was also against the excise duty hike on kerosene by Rs 1, as it would adversely affect a large number of poor.
The Kelkar panel's proposal to withdraw the standard deduction for salaried class was also opposed by the party in its eight-page report to Finance Minister.
The party said exemptions enjoyed by Special Export Zone, backward areas and infrastructure sector should continue.
The Kelkar panel's suggestion of an uniform depreciation rate under Income Tax and Companies Act was also opposed by the party as it might go against Indian industry's endeavour to become competitive in the present globalised era.
The BJP also favoured continuing with the weighted deduction for scientific R&D under Section 35 of Income Tax Act.
The party also diluted the penalty provisions suggested by the Kelkar task force, saying the penalty proceedings should not be clubbed with assessment since they are of quasi-criminal in nature.
While welcoming the reform measures to raise Income Tax exemption limit, modernisation of tax administration and special rebates for senior citizens and widows, BJP recommended faster recovery of tax arrears and modification of one-by-six scheme for assessing income tax.