CGPA/KL/GL/2017/18              dated            15-02-2017

To

Shri. Arun Jaitely

Hon’ble Union Minister for Finance

North Block, New Delhi - 110 001

Sub:   Budget proposals 2017-18 – Personal Income Tax- Additional burden on certain low income senior citizens

Respected Sir,

          This Association appreciates the approach of the Government to reduce the burden of taxation of honest tax payers and salaried persons who are showing their income correctly. We also consider that your proposal “to reduce the existing rate of taxation for individual assessees between income of        Rs. 2.5 lakh to Rs. 5 lakh  to 5% from the present rate of 10%” is a welcome step in the right direction. Your claim is that “this would reduce the tax liability of all persons below Rs. 5 lakh income either to zero (with rebate) or their existing liability.” In order not to have duplication of benefit, the existing benefit of rebate available to the same group of beneficiaries is being reduced to Rs. 2500/- available only to assessees upto  income of Rs. 3.5 lakhs (Para 174 of the budget speech).

            We may submit that your present proposal actually increases the tax burden of senior citizens who are in the income bracket of Rs. 3, 50,010/- to Rs. 3,99,990/- though the intention of your proposal is to reduce the tax liability of all persons below Rs. 5 lakh income. For example, the tax liability for a senior citizen having an income of Rs. 3,50,010/- during the F.Y.2016-17 is Re. 1/- only whereas the tax liability for the same person during the F.Y.2017-18 would be Rs. 2576/-  (including the education cess). We may also bring to your notice that the senior citizens have little scope to avail the concession under section 80(C). We earnestly believe that the Hon’ble Finance Minister would not have anticipated this anomalous position.

          As the intention of the Government is to “reduce the tax liability of all persons below Rs. 5 lakh income,” this Association requests you to be gracious to revisit the proposal and amend it to extend the tax rebate of Rs. 2500/- to all persons having a taxable income below Rs. 5 lakhs.

Thanking you,                                                                                               yours faithfully

                                                                                             T.I. Sudhakaran,    General Secretary
Copy to:     

1.       Com. Shiv Gopal Mishra,Secretary, Staff side JCM, 13-C, Feroz Shah Road, New Delhi – 110 001 – For information and necessary action

2.       Com. K.K.N. Kutty, Secretary General, NCCPA, 13-C, Feroz Shah Road, New Delhi – 110 001 – For information and necessary action