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Exempt income up to Rs 3 lakh from I-T: Parliamentary panel

The skewed personal income tax collection pattern of the government has prompted the Parliamentary Standing Committee on Finance to suggest moderately higher taxes for those who earn more and greater relief for small taxpayers. In fact, it has suggested that the tax should kick in only at annual income levels of Rs 3 lakh and more.

According to latest data collected by the Income Tax department, of the 300 million taxpayers in the country, just 1,85,000 individuals earn over Rs 20 lakh a year. But this small group pays Rs 53,170 crore in personal income tax. The broad categorisation of tax payers shows that individuals in Rs 0-10 lakh comprise almost 92 per cent of the total taxpayer base, but they contribute only Rs 21,094 crore, less than 40 per cent of the amount collected as taxes from the small group earning over Rs 20 lakh a year. The tax payers within the income slab of Rs 10-20 lakh per annum — 3.35 lakh tax payers — paid Rs 10,185 crore to the government, the data showed.

The stark contradiction has prompted the standing committee to suggest that the government should restructure the current tax regime, making it more progressive so that individual tax payers and corporate can be shielded from regressive effects of the present structure. Accordingly, the committee suggests that the tax slab attracting nil rate should be raised from Rs 2 lakh proposed in the Direct Tax Code to Rs 3 lakh so that the department can channelise its resources in minimising the compliance and transaction cost.

“The character of the tax regime should change and it should be made more progressive. This would entail greater relief for small tax payers—both individuals and corporate — and moderately higher rates for tax payers in the higher bracket,” the Parliamentary panel has said.

The panel, currently vetting the proposed DTC has questioned the rationale of the existing tax slabs pointing out that most taxpayers — 2.02 crore of the total 3 crore — fall under the income slab of Rs 0-2 lakh. The number of tax payers further falls to 56.73 lakh in the income slab of Rs 2-4 lakh, making it around 72 per cent in the lowest income bracket for tax purposes. The panel noted that the department should not “diffuse their energies and spread their resources thin over handling such a large number of tax payers with low income potential”.

Another anomaly, the committee has said, lies in the corporate tax structure.

The data shows that the tax collected in the income slab of Rs 0-100 crore is Rs 44,016 crore while that in the income slab of Rs 100-500 crore is Rs 23,421 crore, and Rs 54,558 crore in the above Rs 500 crore slab.

Greater relief

* Let those who earn more pay moderately higher taxes, Parliamentary panel tells government on DTC

* Suggests restructuring the current tax regime so that tax payers can be shielded from regressive effects of the present structure

* Committee says that tax slab attracting nil rate should be raised from Rs 2 lakh proposed in the Direct Tax Code to Rs 3 lakh

Source: Indian Express
[http://m.indianexpress.com/news/exempt-income-up-to-rs-3-lakh-from-it-parliamentary-panel/911271/]

Central Government Employees Group Insurance Scheme - Upward revision of rate of monthly subscription - reg.

NFIR
National Federation of Indian Railwaymen
(Affiliated to Indian National Union Congress)
(Affiliated to International Transport Workers' Federation (ITF) London)

No.II/43

Dated - 13.02.2012

Shri. Pranab Mukherjee,
Hon'ble Finance Minister,
Government of India
New Delhi.

Respected Sir,
Sub : Central Government Employees Group Insurance Scheme - Upward revision of rate of monthly subscription - reg.
Ref : Ministry of Finance O.M. No.7(1)EV/2008 dated 10th September, 2010.

NFIR brings to your kind notice that presently the amount deducted towards Group Insurance Scheme from the monthly salary of different categories of Central Government Employees is as under :

CADRE RESTRUCTURING PROPOSAL CLEARED BY DOPT

CADRE RESTRUCTURING PROPOSAL
The DOPT has at last cleared the Cadre Restructuring Proposal. There has been a reduction of 398 posts in the Group-A cadres up to the level of DCIT. The proposal in respect of Gr.B & Gr.C have already been cleared by the Department of Expenditure and Finance Minister without any changes. Now the cadre restructuring proposal is expected to go to the Group of Secretaries and then to the Cabinet for clearance. Once it is passed by the Cabinet, the additional posts created will be allocated charge-wise and notification will be issued. Promotions/recruitment will take place subsequently.
Cadre restructuring proposal- Changes in Gr.A as approved by the Department of Personnel & Training.

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