Giving small relief to tax payers, Finance Minister P. Chidambaram on Thursday announced a tax credit of Rs 2,000 for persons with income up to Rs 5 lakh.
The proposal, he said, will benefit 1.8 crore tax payers entailing a revenue sacrifice of Rs 3,600 crore.
The other slabs and rates have been kept unchanged in view of constrained economy, he said.
“In a constrained economy, there is little room to raise tax rates or large amounts of additional tax revenues. Equally there is little room to give away tax revenues or the tax base. It is time for prudence, restraint and patience,” Mr. Chidambaram said.
However, he said: “I am inclined to give some relief to tax payers in the first bracket between Rs 2-5 lakh... I propose to provide tax credit of Rs 2,000 to every person who has a total income of up to Rs 5 lakh. 1.8 crore taxpayers are expected to benefit, to the value Rs 3,600 crore.”
As per the existing slabs, tax on income from 2 lakh to 5 lakh is at 10 per cent, up to Rs 10 lakh at 20 per cent and above 10 lakh at 30 per cent.
In the Budget proposals for the next fiscal, Mr. Chidambaram proposed a surcharge of 10 per cent on persons with income of over Rs one crore. The proposal will cover 42,800 individuals and tax entities.
“Even an moderate increase in the level of threshold exemption will mean that hundreds of thousands of taxpayers will go out of the tax net and tax base will be severely eroded,” he said.
KPMG (India) Tax Partner Parizad Sirwalla said: “The overall slabs and tax rates remain same in view of the objective of widening tax base and increasing tax compliance.”
Keywords: Union Buget 2013, P. Chidambaram, income tax, tax credit
@ramu: Atleast for a sub 5 lakh earner it does mean something. Be
positive dude :)
ramu, tax credit is basically a sum of money that the government will
deduct from your tax liabilities. So if you accrue tax upto Rs. 2000,
you will not need to pay anything. Any more than that, then that sum
will have Rs. 2000 deducted from it. It's like a very small discount
coupon on the tax you have to pay. The sum of Rs. 2000 is pretty
insignificant.
Not changing the deductions for travel Rs 800 and medicals Rs 15,000 is an
insult to the people who are earning wages. These out dated rates should
have been changed.
Silly proposal to form a new bank for women. Why cant one or two branches of existing banks in each city to be designated for this purpose ????
The UPA government believes that Rs.166/month in tax deduction for those who earn Rs. 5 lakhs, can earn the votes of all under that income group. While the government is cutting the subsidies for petrol, cooking gas and agriculture, the savings is passed on as tax breakes. These tax breakes are as bad as the subsidies. All tax breakes and subsidies are to be lifted for the budget balance and develop a market economy for growth.
Various Indian Finance Ministers have been fleecing the working class,
whereas they have kept 100 of ways to escape the Tax Net for the
business people. Just a vegetable vendor whose shop is 15x10 in just 10
to 15 years buys huge property and car and give better education to his
kids, compared to a graduate working in private company for 15 years
who also lives in the same location. Look around your vicinity you will
find of many of them- well settled guy, but who just started as grocery
vendor some year ago,ask him to spell tax.?!!
Like! proper governance.
2000 less tax is equivalent to 20000 variation in slab. Will anyone tell me What is tax credit? Whether 2000 less tax is to be paid or I will have to seek Rs. 2000 refund?
For presentation of this budget, Mr. P Chidambaram, FM is not required for the country and even an ordinary MBA could have done this manipulations. Further there is no necessity for floating a state bank with 1000 crores investment at this stage when we have umpteen banks running with more NPAs and Mr. P Chidambaram has infused 14000 crores capital this year. It is rather ridiculous to another bank with all women at all levels of management at this present juncture. There is no prudence handled by the Finance Minister in this budget exercise and it is sheer coverage of his mismanagement of the country's economy for all these years. It is saddened that the women politicians also welcomed the move of the FM. The growth of country's economy is not with implementation of schemes proposed in this budget but with the sincerety of the administrators in curtailing the Government's expenditure in the coming financial year.
Apparently only 42,800 individuals and tax entities make a income of over Rs one crore. That shows us that the system is broken.
Some points of concern over innovative approach of Mr. finance minister, first, people will wrongly try to hide their income to come under 5 lack income threshold, second ,people with income more than one crore per annum will feel less motive of investment or saving and the last the morale of people and growth of the economy will suffer consequently.
I suspect this is designed like the various product/service promotion
schemes of "Cash Back" offer. Perhaps IT payers may get the credit in
their bank account after paying the tax in the normal manner on the
rates and slabs.
What Mr chidambaram has given the salaried people is more than sufficient . These people in every Budget they expect some thing from the Govt. However, their output declines even after they receive from govt. Let the public decide which dept is working sincerely?. These are all aged elephants pampered by salary, quarters, pension and what not?
An employees sees nothing from this budget what to talk of common man.
Mr. Chidambaram is known anti-employee. He will see what happens to
Delhi Government when it faces election later this year.
The FM is worried that a moderate increase in the level of threshold
exemption will mean that hundreds of thousands of taxpayers will go
out of the tax net and tax base will be severely eroded. But he and
the I-T Dept is complacent with the salaried class with just a monthly
salary of 18k. They have no intention to spread the tax base out side
the salaried class. You ask a layman: he will tell you who are earning
ten times the minimum of Rs 2 lakh per year but not paying any tax.
Unless and until that gap is not fulfilled this type of exploitation
of salaried class will continue.
Senior citizens are left high and dry.Their exemption limit kept
unchanged.Will some one explain to me what tax credit is?
I do not know, why successive Finance Ministers of UPA or NDA have been shy of
targeting people from the legal and medical professions, who are perhaps the largest
accumulators of black money. The fact that most of these professionals do hardly
needs any evidence to substantiate.
As in every UPA budget in this one too the salaried class has got a raw deal and the measly relief of Rs2000 for tax payers in the first bracket is not something substantial to write home about. The irony is that while the honest taxpayer (read salary earner) is taxed through his nose, the guys who can juggle figures get away lightly as always.
Both railway budget and the general budget have been devoid of any
lofty promises or big sops. Very pragmatic approach, which has been
in line with the present reality, has been taken by both the
ministers.
Can your Business correspondent in the Hindu explain the implications of tax credit of Rs.2000 to an ordinary IT payer
Whoa ! What a great concession of Rs.166/- per month PC has given to the tax payers !! What generosity !!! The financial wizard may also kindly inform the Indian populace as to what they can buy with this stupendous amount of Rs.166/-.
its a good move by govt.
as i think its the first time ever when budget is somehow concerned
with poor section n compensating its loss from high society. on the other hand its quite clear that the budget is election oriented...
This is a big hoodwinking done to middle class and salary earners who
are reeling under high prices and works out to 0.4percent relief for
those whose income is Rs.500000.00. It is necessary for Government to
check prices of essential commodities. Market rates of items right from
Greens to food Grains are becoming unaffordable to poor and middle
class.
Sustainable budget may not increase the growth rate of GDP beyond 6.6%
and may spur inflation. The key points to India's growth like improving
the infrastructure have not been addressed seriously in the last 9-10
years i.e privatizing the rail and road network and 100% FDI in
airlines, subsidizing health care and liberalizing the higher education
sector including allowing foreign universities to set up campuses in
India. The problem in India is the lack of sensitivity to its poor and
lower middle class people who are in majority in this country.
another scope for the corrupt politicians with Nirbhaya fund and widening the corruption activities in defence area. tax paid by salary earned people ( who are the only honest payers of tax) again going to the hands of so called politician's pocket. what an idea Sirji..What is the tax incentive given to salaried people? Monthly conveyance Rs.800; education allowance Rs.100!!!! Overall limit Rs. 1 lac. Whether it is possible to manage with these now with all these limits.The politicians are simply eating and enjoying the hard earned money of salaried class like me. This Govt has not passed any bill for the benefit of common folk in the last 3 years. The so called politicians are not bothered even if the price is hiked to Rs.100, b’coz they enjoy everything free, free electricity, air travel, allowances, sitting fees, free gas etc etc. India is a developing country in corruption and find out means and ways to corrupt the unseen area of various walks of life.
The budget on the first glance is a a relief to the tax payers in these days of rising inflation. Indeed it was not a mockery as Railway budget
I think providing Rs.2000 tax credit will be of no use. taxpayers expect more from this budget. we are really disappointed.
Most inconsequential budget in recent times. There were more pressing issues in infrastructure and disinvestment other than having a populist "All Womens' Bank".
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