This refers to the Budget Comment by Sitaram Yechury (“ >An exercise in contraction ”, March 1). Continuing with the trend of ascribing the Union Budget to be “pro-corporate”, he harps on the issue of tax incentives to the tune of Rs.5,89,285.2 crore to the rich. What he conveniently forgets to mention is that of this amount, tax incentives on corporate tax are Rs.62,398 crore, that is, a little over 10 per cent of the total tax incentives. This includes tax exemptions to PSUs, which are actually higher than that for private entities (PSUs enjoy a lower tax rate of 19.33 per cent as against 24.44 per cent for private entities). Though still very high, the revenue foregone on corporate tax exemptions is still way lower than the total budgeted subsidies — Rs.2.44 lakh crore — which belies his claim that our economy suffers a deficit burden primarily due to subsidies given to the rich.
Arpit Agrawal,
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The Finance Minister ought to have clarified the difference between the total service tax collected as against corporate tax collected during the financial year. This figure would have reflected the impact of a reduction in corporate tax. It would have had meaning had corporates claiming 5 per cent reduction in tax for the next four years come up with a rider to either plough in a 2.5 per cent share into agricultural development and allied areas or a 50 per cent share into adopting villages for four years and then claiming reduction after showing the proportionate share for the year. On the other hand, the Budget proposes an increase in service tax, which will make every citizen making use of a service cough up additional tax, a figure that would surpass the total corporate tax for a year. Separately, the amount being collected for a Rs.2 lakh insurance cover is an eyewash.
G. Nagendra,
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The Budget has not done justice to the low-income group of senior citizens. I am a senior citizen solely dependent on the returns I get from my investments. My income does not exceed Rs.4 lakh a year and I am required to pay Rs.10,000 as income tax plus service charge and so on. That leaves me with about Rs.3,90,000 or Rs.32,500 a month, enough for my wife and me to lead a fairly comfortable life. Now, if I wish to go out of the tax net, I will have to invest a lakh in tax-saving instruments, which will reduce my annual income to Rs.3 lakh (a monthly income of Rs.25,000) which will not be enough for us.
There are bound to be countless senior citizens who are in a similar predicament, if not worse. The point is that the Budget appears to have been put together mindlessly by bureaucrats.
Krishna Raj,
Chennai