Confederation of Central Government Employees and Workers and Central Government Employees Coordination Committee of Kanpur on Friday demanded to restore the standard deduction under Section 16(1) of the Income Tax Act.
In a memorandum to the finance minister, Pranab Kumar Mukherjee, they urged that the central government had withdrawn standard deduction admissible under Section 16(1) of the Income Tax Act to the salaried tax payers by the Finance Act, 2005.
No valid reason or logic was given at that time and since then they were demanding the restoration of standard deduction. Sharad Prakash Agarwal, general secretary of the committee said that the salaried tax payers pay their taxes to the government without indulging in any evasion or avoidance and tax on the salary earned by them is properly deducted at source by the employers. While the expenditure incurred by every tax payer in the country for the purpose of earning the income was allowed as an admissible deduction.
No such deduction was now permitted while computing the taxable income from salary. Only salaried tax payers were removed from the ambit of this logical and genuine approach of taxation of income, he added.
He also demanded re-introduction of the standard deduction at the rate of 30% of the total salary of an individual.