The Left parties have urged the finance minister to reintroduce long-term capital gains, hike wealth tax to 3% from the present 1%, be harsh on corporate tax exemptions and increase the education cess at 2% now.
RUN-UP TO BUDGET Re-introduce long-term capital gains at 15% Allow standard deduction for salaried employees Enhance health allowance for senior citizens Increase education cess from the present 2% Tax the billionaires, hike wealth tax to 3% from 1%
In their Budget wishlist, the parties also pitched hard on Saturday evening for tax relief to salaried employees and pensioners. They said the salaried class should be allowed standard deduction to bring them on a par with businessmen, particularly since the I-T exemption limit, too, was raised to Rs 1.5 lakh in Budget 2006-07. For senior citizens who could not access the Central Government Health Scheme, the Left parties sought an increase in health allowance.
The Left also demanded that additional funds for expanding secondary and higher education be generated by increasing the education cess. Taking taxpayers for granted, the Left note said, Tax payers do not resent paying the education cess since it directly contributes to social welfare.
Targeting a growing list of Indian billionaires, the Left insisted on an immediate increase in the wealth tax rate from 1% to 3%. Initiatives need to be taken to broaden the wealth tax base by bringing all the urban as well as rural crorepatis into the tax net. The wealth of the richest Indian grew by over Rs 32,000 crore, which is nearly 1% of Indias GDP. One wonders why in such a backdrop, the wealth tax collection remained a paltry Rs 265 crore in 2005-06, and exactly the same amount was budgeted for 2006-07, the Left note said.