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Income-tax: Marginal benefit

In the current year, there has been better tax compliance by individuals. I hope this trend will continue.

The current slabs and rates of personal income tax (PIT) were introduced only two years ago.

They constitute a moderate tax regime.

A comprehensive review should await the proposed income-tax code which will be introduced in Parliament this year. Nevertheless, without altering the rates, I am inclined to consider giving some relief to tax payers, especially in view of the cooperation they have extended to the Department of Revenue. Accordingly, I propose that:

  • the threshold limit of exemption in the case of all assessees be increased by Rs 10,000, thus giving every assessee a relief of Rs 1,000;

  • consequently, in the case of a woman assessee, the threshold limit be increased from Rs 1,35,000 to Rs 1,45,000, giving her a relief of Rs 1,000;

  • the threshold limit of exemption in the case of a senior citizen be increased from Rs 1,85,000 to Rs 1,95,000, giving him or her a relief of Rs 2,000; and

  • the deduction in respect of medical insurance premium under Section 80D be increased to a maximum of Rs 15,000 and, in the case of a senior citizen, a maximum of Rs 20,000.

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