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Ficci moots reforms in personal taxation

The Federation of Indian Chambers of Commerce and Industry (Ficci) has mooted the reforms in personal taxation including reduction in maximum marginal rates for individuals and withdrawal of surcharge on income tax.

In its pre-budget memorandum, the Ficci said the marginal rate of tax for individuals at 34.5 per cent including surcharge was higher compared to rates in neighbouring countries for people with over Rs 150,000 annual income.

"The tax rate should not exceed 30 per cent and should be applicable on income exceeding Rs 300, 000 annually." Demanding withdrawal of surcharge on income tax, the Ficci said it was introduced as a temporary measure.

On standard deduction, it said monetary ceiling must be dispensed with and it should be allowed uniformly to all categories of employees.

Medical reimbursement should be exempted from tax without limit or else the same should be equivalent to one month's salary or Rs 30,000, whichever is higher.

Observing that discriminatory tax treatment in valuation of perquisite for residential accommodation is unwarranted for private sector employees, the chamber said it should be taken at 10 per cent of the salary as is the position regarding other employees.

It called for re-introduction of section 80cc of the income tax act to boost the primary market.

Income of physically handicapped persons should be out of the tax net up to a ceiling of Rs 150,000, Ficci said.

The benefit of exemption of interest income on deposits made by retiring government employees should be extended to such employees of private sector.

It sought provision for treating as allowed rectification petition of assessee's if not disposed off within a year.

Suggesting abandoning the concept of assessment year it said after adoption of uniform accounting year it had become redundant.

UNI

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