Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: cpt :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: VAT RATES :: ACCOUNTING STANDARD :: due date for vat payment :: TDS :: ACCOUNTING STANDARDS :: form 3cd
 
 
News Headlines »
 How to claim income tax refund
 How to time your buys to have best of two tax regimes
 Here's why you must always check Form 26AS before filing tax return
 Want to file your income tax return after June 30? Having Aadhaar card is a must
 Timeline for filing of tax returns extended by two months
 Top 5 common mistakes to avoid while filing your income tax returns
 GST rollout on July 1: Deadline for filing tax returns extended
 What is GST?
 Income-tax (15th Amendment) Rules, 2017?
 Banks get a breather as GST Council extends deadline for tax filing
 Income Tax filing: Your easy guide in 7 steps

A raw deal for salaried
November, 25th 2006

Relief denied

I am not a party pooper which several of my angry geek-friends described me as when I wrote in these columns wondering why the employee stock option scheme, particularly popular in the IT sector, begets the taxman's indulgence. This time round it may be the turn of widows and other dependants to target me for spoiling their small party.

The Finance Act, 2005 abolished standard deduction for employees on the ground that with the increase in the tax-free threshold as well as with the rationalisation of the existing slabs, there was no case for this prop. The mandarins of the North Block were rather magnanimous in not simultaneously deleting Section 57(iia), which allows standard deduction to those receiving family pension. Or was it a case of benign negligence?

Defies justification

It is not as if the author is begrudging the small mercy to the dependants of the deceased employee. There was absolutely no justification for doing away with standard deduction on the specious plea that the tax rates have come down. The tax burden has indeed come down but the beneficiaries are not the salaried class alone. Has any of the numerous expenses which a businessman or professional incurs been done away with? No. In the event, wrenching away of standard deduction, which is in the nature of relief for expenses an employee incurs in the course of performance of his duties, is a cruel blow to him.

True, those calling the shots in the company, such as managing directors and executive directors, do not deserve this deduction because the company effectively takes care of their entire creature and other comforts as well as bears every conceivable expense they incur. But the garden-variety employee gets none of these indulgences from his employer. The Government, therefore, should have retained the standard deduction dispensation at least in respect of low- and middle-level employees by specifying a salary threshold for this purpose instead of tarring all the employees with the same brush.

Deserves sympathy

The low- and middle-level employees deserve the same sympathy, which dependants of the deceased employees have rightly got whether intentionally or otherwise.

The Finance Minister should carry on with the good work of training his guns on the hard-to-tax categories and smoking them out instead of getting squeamish with the salaried class whose tax-compliance rate can be easily rated the highest even without a survey.

The salaried deserve standard deduction on one more ground as an incentive for baring their chests to their employers while they deduct tax at source even as their business and professional counterparts merrily arrange their tax affairs in such a way that they can get away with minor bruises if at all.

S. Murlidharan
(The author is a Delhi-based chartered accountant.)

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Privacy Policy

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions