« Top Headlines » Open DEMAT Account in 24 hrs  BackBack Income Tax Act amendment on cards on tax treatment of MSME dues  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing. Check details here  Income tax slabs FY 2024-25: Experts share these 8 benefits for taxpayers in new income tax regime  How To File ITR Online - Step by Step Guide to Efile Income Tax Return, FY 2023-24 (AY 2024-25)  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately  Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing «  Bank deposits to get 80C deduction — Recapitalisation bonds... Corporate social conscience... » Field levelled for deposits August, 07th 2006 It is time ordinary individuals enjoyed a level playing field with corporate assessees in the matter of income taxation. The recent notification on tax deduction for bank deposits redeems the Budget promise of extending the shelter provided to savings made by individuals. The banking industry would have reason to feel satisfied at the turn of events. It had for long complained that its deposit schemes had to compete for a share of the tax-payers' surpluses with certain other instruments of savings that had the added attraction of offering a tax shelter. The Finance Minister had, while presenting the Budget, promised to end such discriminatory treatment, and this has now become a reality. But it is a moot point if banks will really see any dramatic rise in the level of deposits. For one, potential depositors are unlikely to make any significant changes to their portfolio of tax-deductible savings. This is because, some of the eligible investments may either be imposed by statute for instance, the provident fund contributions or are long-term financial commitments such as the repayment of housing loans and premiums paid on life-insurance policies rendering any reshuffle a distant prospect. The other major inhibiting factor is the ceiling of Rs 1 lakh on such savings for the purposes of claiming tax exemption. Salaried tax-payers in the middle- and upper-middle income groups the key targets of such deposits could reasonably be expected to have breached the ceiling and, hence, would have no incentive to divert their surpluses to avenues not covered under the tax exemption scheme. There is a good case for raising substantially the ceiling, if not abolishing it altogether, if the Government is really committed to providing a level playing field for the banking industry. The abolition or a substantial enhancement of the ceiling on approved instruments of savings would actually pave the way for the Government to usher in the EET (exempt exempt taxation) regime where contributions and incomes accruing on such contributions are exempt from taxation till such time the accumulated money is withdrawn for consumption. An EET regime that confers on an individual the flexibility to shift the timing of the burden of taxation is incompatible with any quantitative restrictions on the proportion of one's current income that can be shifted to a future date, for tax purposes. Such an approach would also be in accord with the tax regime that corporate assessees are subjected to, where special incentives for investments or accelerated depreciation on assets mitigate to a large extent the burden of taxation on current profits. It is time ordinary individuals, without the privilege of high-pressure lobbyists taking up their cause, enjoyed a level playing field with corporate assessees in the matter of income taxation.