'The salaried class is between the devil and the deep sea'

Rajesh Gupta, partner, KPMG

“I would say that the Union Budget 2002-2003 has not been good from the individual point of view. There was an expectation that the surcharge would be abolished but now everyone is stuck with the 5% surcharge. From the governments point of view this has been purely a financial compulsion as it is constantly looking for resources.

“There has been absolutely no relief for the tax payers. Tax slabs remain the same so does the standard deduction. It was widely expected that the exemption limits on standard deduction would go up. This will create adverse reactions as the tax burden has increased. Adding to the woes is the slabs introduced in the tax rebates. This will cause more heartburn. Had this been accompanied by the lowering of income tax rates things would have been simpler. With no rebated over Rs 5,00,000 people would be dissuaded from making investments in instruments specified under Section 88.

“With the reduction in the interest rates on small savings I would say that the taxpayer is between the devil and the deep sea. He does not have much of a choice in terms of making an investment, which would offer good returns. The reduction in rates would reduce the attractiveness of the small savings schemes.

“The limit for tax deduction for interest paid on housing loan remains unchanged at Rs 1,50,000. In a place like Bombay, where the cost of a flat is pretty high, a high-end relief would have been appreciated. But Rs 1,50,000 is also a decent amount.

“ The Budget has left very little options to the salaried individuals in terms of investment. At the end of the day, he would not be a happy person.”

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