Ahead of the annual budget, here’s some cheer for salaried employees and pensioners. The finance ministry is considering bringing back standard deduction of up to Rs 20,000 in individual taxable incomes.
According to revenue department officials, the government may be willing to take a small hit in return for a spike in spending that it hopes will result from a bigger disposable income with the salaried classes.
Till the budget for 2005-06, a standard deduction of Rs 30,000 or 40 per cent of income, whichever was lower, was allowed to salaried employees with an annual income between Rs 75,000 and Rs 5 lakh. For those earning more, the standard deduction was fixed at Rs 20,000.
The standard deduction was meant to compensate salaried people for the fact that self-employed small businesspersons or entrepreneurs paid tax only on their net income after deducting business expenditure.
Industry has been demanding the re-introduction of standard deduction so that individual taxpayers are able to spend more and stimulate domestic demand. As Indira Gandhi’s finance minister, Pranab Mukherjee had in fact, raised it from Rs 5,000 to Rs 6,000 in the budget for 1983-84.
SOURCE : INDIAN EXPRESS
RAIL BUDGET
Officials in the railway ministry are discussing a proposal by Railway Minister Mamata Banerjee to cut the premium on Tatkal (instant) tickets and reduce its booking period to give the railway budget an aam aadmi touch.
According to sources in the railway ministry, the new minister has reportedly received several appeals about the Tatkal scheme and has asked her officers to examine these aspects.
Tatkal berths come at a premium of Rs 75 to Rs 300, depending on the nature of the train and demand, and the booking windows are open five days before departure.
By reducing the booking time-frame further, the argument runs that people will have a bigger opportunity to access more non-premium tickets and rid the Railways of the stigma that Tatkal was legalised touting.
A section of the ministry, however, thinks the Tatkal premium is valid because the Railways has not increased basic passenger fares despite a steep increase in operating costs.
Some officials point out that a longer booking window for Tatkal actually makes it more convenient for the passenger to buy tickets and reduces the proclivity to access the black market.
During the last three years of his tenure, Lalu Prasad had more than doubled the number of Tatkal seats. These additional Tatkal seats were taken out of the berths available under normal reservations, making it harder for passengers to buy cheaper tickets in advance.
In 2005-06, the daily average number of berths in the Tatkal quota was 43,000. The following year, Prasad increased it to 57,000 and in 2007-08 he raised it to 98,000.
Revenue for the Railways from Tatkal almost doubled from Rs 200 crore in 2006-07 to Rs 396 crore in 2007-08 and around Rs 500 crore in 2008-09.
Currently, passengers can also book wait-listed tickets under the Tatkal quota. When the final reservation chart is prepared, the Railways distribute the vacant berths between the general quota and the Tatkal in 1:1 ratio.
Since the general waitlist is much bigger than the Tatkal waitlist, the chances of a Tatkal waitlisted passenger getting a confirmed ticket are higher. While this planning also encourages passengers to buy Tatkal tickets, Banerjee has not yet decided to change this ratio.
Source : Business Standard.
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