By RAJIV GOYAL
Finance minister should be thanked for his appreciation of employees who constitute maximum group among the income tax payers and paying diligently. This is the group who is compensating loss to the exchequer on account of tax evasion by other groups.
While inflation should have been considered while setting up limits for income tax, standard deduction, which is one of the biggest relief across the world , to compensate losses to the employees for maintaining their living; and was much expected for the reintroduction, finance minister has failed to cherish this biggest group of income tax payer as well as of middle & lower income group. Effectively, income tax has increased by 10% over the last year to employees, fitting into impact of inflation in salary.
While reducing the limit to 50 lac for levying surcharge at 10% from a limit of Rs 1 Cr earlier is really something which would affect market sentiments by way of reduced purchase capacity by employees.
The government is playing ostensibly Robinhood in terms of levy of income tax taking the advantage of general spirit of revenge among poor people against riches. Being riches is not bad for growth of economy and such a play would ultimately bring more financial difficulties to poor in longer terms.
On the other hand , people with unaccounted money are given good opportunity by reducing Capital gains taxes on immovable property to 2 years from 3 years. Now such people has better capacity to purchase property with unaccounted cash money and then selling in 2 years on cheque by declaring capital gains, paying effectively 11-12% of income taxes.
A very big blow to salaried people of Rs 50 lac and above group is not only in terms of additional surcharge but also limiting interest loss to Rs 2 lac for the house, purchased with loans, and rented by them
The government has also not declared any target of appointing vacant positions among government sector which is now as high as 20 lac across country.
Overall, finance minister has lost any opportunity to bring any cheer among employees
