The Hindu Business Line : Tax revenue

This is with reference to "Burgeoning revenues" (Business Line, November 10). It rightly observes that tax revenues collected should be distributed for the welfare of the poor and needy, by providing more infrastructure facilities.

The tax revenue has increased on account of cuts and rationalisations. Assessees respond positively to the simplification of tax rates and procedures.

Actually, reduction of tax rates in the previous years was in itself is a reward for the tax payer. The Finance Minister's observation that more cuts are in the offing for personal and corporate segments is more good news.

The personal income tax structure will be simpler if the deduction under Section 80 C is increased from the Rs 1 lakh level.

This will encourage domestic savings and the government could mobilise more funds through this route. Many of the old small-savings schemes have ceased to be deposit-friendly on account of the fall in interest rates and the long periods of maturity.

Suitable revisions of these schemes would make them attractive again. The Government cannot increase the interest rates on these savings. Concessions on income-tax and shorten ing of maturity periods will bring more people into the savings net.

C P Velayudhan Nair

Kochi

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