Financial Daily from THE HINDU group of publications
Monday, Dec 30, 2002

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Opinion - Letters

Rebate for savings

This is with reference to the article "Is the party over for savings?' (Business Line, December 28). The article rightly points out the rigidity of the Kelkar proposals with regard to savings.

While the committee adopted a soft approach in respect of a few other issues it has turned a deaf ear to the demands in respect of tax rebate on savings.

It is a well-known truth that small savings in India are purely based on the rebates on income tax. In many cases, even the insurance policies depend on the quantum of tax rebate under Section 88.

While the Committee has proposed to do away with the tax on dividend, which may provide a fillip to "investments in the economy", it has dealt a death blow to the various small savings schemes, and thousands of agents who earn their livelihood through them. The Committee should review its stand on small savings.

C.P. Velayudhan Nair


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