Here are some suggestions for the kind consideration of the finance minister to ameliorate the sufferings of the common man from the trials and tribulations of daily chores, and to help him/her to live a life of peace, free from the struggles of making both ends meet in these days of growing cost of living and stress and strains of every day life
It is budget time of the year again. The finance minister (FM) is busy meeting the captains of trade, commerce and industry to ascertain their demands from the ensuing budget. As per a PTI report, the FM told the global investors last week that the budget to be presented this month will be a “responsible budget”. Let us hope that he will be responsible and instrumental for making life a bit easy for the common man of this country. But the voice of the common man is never heard nor understood either before or after presenting the budget. Let us at least make our voice heard through the columns of Moneylife, the selfless organisation dedicated to the cause of the common people of our society. So here we present our “guzaarish (a petition), khwahish (a wish) and farmaish (a request)” to the FM on the ensuing budget on behalf of the common men and women of our country.
What can the FM do to improve the life of the common man?
1. First and foremost, there is a need to raise the basic exemption limit from taxes for all class people from the present limit of Rs2,00,000 to at Rs4,00,000, as there is a need to give relief to a large number of people who are really struggling to make a living, because of the runaway inflation present in the economy for the last three years. To keep pace with inflation, this limit should be linked to inflation at least in future years.
2. Similarly the basic exemption limit from taxes for women to be fixed at Rs5,00,000, as they are the ones who have to balance the kitchen budget of every household, but are most hard-pressed to make both ends meet, and they have no recourse to any deficit financing that is available to our finance minister. The additional exemption available to women was suddenly withdrawn in the last budget without any rhyme or reason, and now there is a need to restore this additional exemption from taxes in the context of the need for them to spend on safety measure to protect themselves from the growing atrocities faced in their day-to-day life.
3. The basic exemption limit to senior citizens too deserves to be raised to Rs6,00,000, as they are the people who have given their best during the working years of their life, and with the dwindling purchasing power of the rupee, they find it difficult to maintain their standard of living during the second innings of their life.
4. The super senior citizens are the most deserving of all. The basic exemption limit for them is to be raised to Rs10,00,000 from the present Rs5,00,000 to enable them to live a life of dignity and tranquillity. It is during these years that there is a heavy demand on their purse to maintain their health, which takes away considerable part of their savings. The benefit of health insurance is also not easily available to them at this age of their life, due to which they need a healing touch from the finance minister.
5. For the first time in the history of our country, the Finance Act, 2012, recognized a person who reaches the age of 80 years as “Super Senior Citizen” and a higher exemption limit was conferred on him/her. This was a gift from the finance minister to the elder population of our country, who live beyond 80 years, which is indeed creditable. In order to make such an honour available to a larger number of our people, it is necessary to bring down this age limit to 75 years so that it goes well with the platinum jubilee celebrations of the individual, who certainly deserves recognition at that ripe age. As there are not many super senior citizens in the country, this does not affect the tax collections at all and bringing it down to 75 years, would be a well deserved honour to these septuagenarians.
6. The most deserved gift the FM can give to the banking public before the venerable former governor of RBI and the present PM Manmohan Singh lays down his office next year is to totally abolish TDS (tax deducted at source) on bank interest, as it is the most obnoxious of all regulations of the Income Tax department. Despite all the goading by RBI to banks, even today, majority of banks do not bother to send the TDS certificates to their customers every quarter as required by law, unless one demands for it. At present tax is deducted at source on bank interest paid in excess of Rs10,000 per year. This threshold of a paltry sum of Rs10,000 for deducting tax at source is a pain both to the deductor and the deductee, because, it only increases paper work and a large number of non-assessees have to either file their return of income to get a refund, or file Form No.15 with the bank, which, more often than not, fails to make a note in their records causing avoidable inconvenience to the public. Abolishing TDS on bank interest will only help in financial inclusion and will be a big boost to the banking sector in our country.
7. The Finance Act, 2012, has exempted senior citizens who have no business income from paying advance tax, with a proviso that appropriate tax due, if any, is to be paid before filing the tax return. In view of this exemption available to them, there is no meaning in subjecting them to TDS, which should be totally abolished for all people including senior and super senior citizens, who can be free from the clutches of banks and financial institutions in the evening of their life.
8. The common man today faces a double whammy. On the one hand the premiums on health insurance policies are hitting the roof, and on the other, hospital charges are increasing by the day. In order to have a health insurance policy of a reasonable value for every individual, the rebate for health insurance premium be raised from Rs15,000 to Rs40,000 per person, and from Rs20,000 to Rs50,000 for the senior and super senior citizens.
9. Interest on saving bank (SB) accounts alone up to Rs10,000 is tax free at present. This is sheer mockery of the entire tax system. When dividends paid to all and sundry, whether big share holders or small are totally tax free at the hands of recipients, it does not stand to reason why honest and ordinary middle class who deposit their hard-earned savings with banks are made to pay income tax without any exception. It is only the middle-class population that deposit their savings with banks while all the rich and wealthy play in the stock market and they are rewarded by exempting dividends from taxes completely. It is a long felt need that all interest earned on banks deposits of all kinds, whether savings or fixed deposits, should be totally exempted from income tax and thus remove the most regressive taxation ever from the statute book. This will not only provide considerable relief to the bank depositors, who suffer under the burden of rising inflation, but give a shot in the arm to the banking sector, which is starving for deposits from the public, who feel investing in gold is better than investing in bank deposits. In order to convert investment in gold into bank deposits, thereby helping the government to reduce the trade deficit, the only solution is to make bank deposits attractive by giving complete tax exemption on interest to savers in banks. The finance minister will surely see miracles happening in this field, if the tax burden is totally removed for the common man who invests in bank deposits. When non-resident Indians have been showered with tax free income on all their NRE and FCNR deposits, why resident Indians should be denied of this basic benefit just because they live in India and not abroad?
10. At present under Section 80 DDB of the I-T Act, deduction to the extent of Rs40,000 is permitted in respect of expenditure incurred for self and dependent relatives for medical treatment of specified diseases or terminal ailments. Today, any medical treatment for chronic diseases costs not less than a few lakhs of rupees, and hence this limit ofRs40,000 is chicken-feed. It is therefore, necessary to raise this limit to at least Rs1,00,000 per year, which will be a great relief to the sick and elderly who suffer due to no fault of theirs.
11. Under Section 80DD of the I-T Act, any expenditurefor medical, nursing and rehabilitation incurred on dependent suffering from permanent disability is allowed as a deduction up to Rs50,000 (Rs1 lakh if the disability is severe—exceeding 80%) per year. With the rising cost of nursing and medical expenses, there is an urgent need to increase this limit to Rs2,00,000 per year, per dependent, irrespective of the level of disability, to help those families who are unfortunate to have such dependents needing special attention and care.
The above suggestions are for the kind consideration of the FM to ameliorate the sufferings of the common man from the trials and tribulations of daily chores, and to help him/her to live a life of peace, free from the struggles of making both ends meet in these days of growing cost of living and stress and strains of every day life.
This is an appeal to the FM to be generous enough to consider these basic requirements of our citizens, who deserve nothing less than a decent life and a much better deal from the government, as this will be the best opportunity to win over the faceless and voiceless middle-class of this country suffering silently under the burden of stubborn inflation and the rampant corruption pervading our society making life difficult for a large majority of people of this country. If the FM can touch millions of hearts and spread smiles on a billion faces though a single fiat of a budget, it would be a great day for all Indians.
(The author is a banking and finance professional writing for Moneylife under the pen-name ‘Gupur’)