The Hindu Business Line : `Raise personal I-T exemption bar to Rs 1 lakh'

THE Tamilnadu Chamber of Commerce and Industry has sought an enhancement of the threshold exemption limit for personal income-tax from Rs 50,000 to Rs 1,00,000.

In a pre-budget memorandum submitted to the Union Finance Minister, Mr P. Chidambaram, the chamber, alternatively, suggested that to keep the existing assessees on record, tax rates should be rationalised.

The chamber team led by its President, Mr S. Rethinavelu and accompanied by the Dindigul MP, Mr N.S.V. Chitthan, that met the Revenue Secretary, Mr K.M. Chandrasekar, and other higher officials and said that the tax on income below Rs 1 lakh must be restricted to the actual tax payable or be granted a tax rebate of Rs 9,000.

Income above Rs 1 lakh to Rs 2 lakh should be levied a tax of 10 per cent; income in the range of Rs 2 lakh to Rs 5 lakh be taxed at 20 per cent; and above Rs 5 lakh at 25 per cent. Further, the tax on partnerships should not exceed that of individuals. It is imperative that corporate tax rate be reduced to 30 per cent and all surcharges are abolished.

On Capital Gains Tax, the chamber suggested that the rate should be reduced to 10 per cent at least on residential properties to encourage tax compliance and for the promotion of the construction industry in the country.

Other suggestions by the chamber relate to the ceiling for the applicability of section 44AB regarding Tax Audit for non-corporate entities, raising of the limit fixed for acceptance of loans/deposits in cash under Section 269 SS of the income-tax Act, prescription of an exemption limit for service tax, raising of the Central Excise exemption/concession limit for the small scale industries, bringing down the maximum rate of excise duty from 16 to14 per cent and provision of an exemption from excise duty in respect of refined edible oil and rice bran oil.

On VAT, the chamber said there should be an intermediate rate of 8 per cent to accommodate goods of importance but not essential; residuary items under VAT to attract only 4 per cent; no opening of closed assessments under VAT; provision of tax-exemption under VAT for all agricultural products and commodities made out of them like flour of rice, wheat, grams and pulses, milk powder etc.; similar exemption also for agricultural inputs like fertilisers, pesticides and seeds and keeping in abeyance the penal provision under VAT for two years.

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