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Standard deduction limit may be raised
R Prema in New Delhi |
February 25, 2003 14:18 IST
Political compulsions and pressure from industry and consumer associations may force Finance Minister Jaswant Singh to present a soft and populist Budget on February 28.
The finance minister is likely to limit personal income tax slabs to just two -- 20 per cent and 30 per cent -- of the taxable income, while raising the floor level of tax-free income from Rs 50,000 to Rs 80,000 in his first Union Budget.
The finance minister is under pressure from his Bharatiya Janata Party colleagues and other consumer associations not to scrap standard deductions as recommended by the Kelkar committee on direct and indirect taxes.
Sources say that Singh may even raise the standard deductions allowed from income in calculation of tax from the present Rs 20,000 to Rs 30,000.
Another proposal made by the Kelkar panel that may not be implemented -- at least in the impending Budget 2003-04 – is the decreasing the rebate allowed on housing loans, and medical and educational expenses.
Finance ministry sources said that the ceiling for savings in pension funds will in all likelihood be doubled from the present Rs 10,000 to Rs 20,000.
Jaswant Singh is also likely to announce a new pension scheme for lower middle class and the poorer sections, covering the organised and the unorganised sectors.
In case of the senior citizens and widows, finance ministry sources said, income tax might not be levied up to an annual income of Rs 1.20 lakh (Rs 120,000).
The finance minister, sources said, might announce an interest protection scheme for senior citizens to ensure that they do not suffer on account of the falling interest rates on savings.
An inflation-linked interest income scheme is proposed to ensure that the citizens maintain their standard of living.
Meanwhile, the presentation of the Railway Budget has been again changed slightly. First, it was slated for February 24. However, since Prime Minister Atal Bihari Vajpayee is attending the Non-Aligned Meet in Malaysia, the Railway Budget's presentation was postponed to February 26, the date of polling.
The Railway Budget was earlier to be tabled in the Lok Sabha on February 26 at noon after the question hour, but now the question hour has been dispensed with on that day, so that the Rail Budget can be presented as soon as the House meets at 11 am.
Since February 26 is also fixed for a day-long debate on Ayodhya, it was felt that the debate will be able to start late only in the post-lunch session as Railway Minister Nitish Kumar is expected to take at least an hour in presentation of his budget.
The question hour has already dispensed with for the Union Budget presentation and hence it was decided that the same can be done for the Railway Budget as well.
The Economic Survey, the official assessment of the state of economy, is generally presented two days before the Union Budget, but it was felt it cannot be done on February 26 when Parliament already has the heavy agenda of the Railway Budget and the Ayodhya debate and hence the Economic Survey will be now tabled on February 27.
Run-up to the Budget 2003