Not taxing, no big relief
The exemption limit for individual taxpayers has not been enhanced; rates of income tax for 2003-04 also remain unchanged.india Updated: Mar 01, 2003 09:22 IST
Finance Minister Jaswant Singh’s budget has not brought much cheer to the common taxpayer.
The exemption limit for individual taxpayers has not been enhanced; rates of income tax for 2003-04 relevant to the assessment year 2004-05 also remain unchanged.
The surcharge for individual taxpayers with incomes up to Rs 850,000 has been removed, but for individuals and Hindu undivided families with higher taxable incomes, a 10 per cent surcharge has been proposed, which is way too high.
The standard deduction for salaried people will be 40 per cent of the salary subject to a maximum of Rs 30,000 for salary incomes up to Rs 5 lakh. It will be Rs 20,000 for those with incomes over Rs 5 lakh.
For those with salary incomes between Rs 90,000 and Rs 150,000, the impact in terms of tax-saving will be virtually nil. But those with salaries between Rs 150,000 and Rs 300,000 will save income tax of Rs 1,500, those with salaries between Rs 300,000 and Rs 500,000, Rs 3,000 and those with salaries over Rs 5 lakh, Rs 6,000.
The tax rebate for senior citizens has been hiked to Rs 20,000. Which means no tax for senior citizens with incomes up to Rs 153,000 per annum.
Dividend income from company shares and mutual funds has been exempted.
Long-term capital gains on selling listed securities has been proposed to be exempted in full but only in respect of shares purchased after April 1, 2003.
For individual taxpayers, the good news is that the deduction
in respect of interest on housing loans taken after April 1, 1999
will continue to be deducted for the next financial year up to Rs 150,000.
Corporate taxpayers and partnership firms will continue to be taxed at the rate of 35 per cent, but the surcharge will be 2.5 per cent, down from 5 per cent.
(The author is an income tax and investment consultant)
A new relationship with the taxman
PAN ALLOTMENT will be the job of private enterprise. You may not have to visit the tax office
FILING RETURNS will be simpler. You’ll have to fill a single-page tax form. After a change in the law, you’ll be able to file returns electronically
SCRUTINY will be limited to 2 per cent of returns, picked randomly by a computer. Which means reduced chances of harassment by taxmen
REFUNDS will be remitted electronically to your bank account. So, no more running around to get back your money
TAX RAIDS will no longer mean seizure of stocks or forced ‘confessions’. If taxmen take away account books, they can’t keep them for more than 10 days