The Hindu : Not a rebate

Online edition of India's National Newspaper
Wednesday, May 08, 2002

Opinion

Opinion - Letters to the Editor

Not a rebate

Sir, — This refers to the letter, `Spare senior citizens' (May 1). Tax rebate for them under Section 88 B has been enhanced to Rs.15,000 from the assessment year 2001-2002. This means that the tax liability of senior citizens with an annual income of up to Rs.1,30,000 would be nil. Yet, under the revised rules for TDS, a sizable amount of ``tax'' would be deducted where nothing is payable and senior citizens compelled to wait indefinitely for refunds. According to the amended provision for TDS, self-declaration claiming exemption can be given only if the income from interest etc. is not more than Rs.50,000, which is the present free slab. If, for example, the annual income from interest, etc. is Rs.60,000, TDS of Rs.6000 plus surcharge will be deducted whereas the tax payable in the normal course will be only Rs. 1000/- even without rebate. Thus nearly Rs.12,000 or more will remain with the Government at any time since it will take a minimum of two years for a refund to materialise. Collecting tax where it is known to be not due and then refunding it is no way of granting rebate.

V. Krishnamachari,
Mumbai

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