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I am a government employee. After the pay hike given on the basis of the Sixth Pay Commission recommendations, I find my tax outgo unbearable so much so that I wish albeit irrationally that I had not got this increase. I believe this would be aggravated when I get the remainder 60 per cent of the arrears soon. What can I do?

K. Achiah, Bangalore

I am able to get your point and empathise with you. The Government should not give with one hand what it is going to take away with another. There is a crying need for hiking the limit under Section 80C to Rs 3 lakh, which the government is planning to do from next year. There is no reason why this cannot be advanced by a year by bringing an ordinance urgently. This would be in the Government’s interest also because the money mopped up thus would help fight inflation given the fact that greater amount of cash in circulation without corresponding increase in supply of essential commodities would only fuel inflation.

People do not mind locking their money in tax saving avenues, as much as they mind paying taxes, even if the rate of interest offered is low. Therefore, on the extra Rs 2 lakh, the Government may even offer less by way of interest.

S. MURLIDHARAN

More Stories on : Income Tax | For the Asking

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