Dispelling misconceptions that the middle class would be hit by the Task Force recommendations on taxes, Vijay Kelkar, advisor to Finance Minister Jaswant Singh, said on Saturday that the tax incidence on various income groups would be "much less and not more" as claimed in certain quarters.
Quoting official estimates, Kelkar told PTI that a salaried person earning Rs 80,000 to Rs 100,000 would pay Rs 1,224 less as Income Tax while a person earning above Rs 10 lakh (Rs 1 million) would pay Rs 69,597 less.
The relief to non-salaried taxpayers ranges from Rs 382 for an income of Rs 50,000-60,000 to Rs 82,946 for persons earning above Rs 10 lakh, he said.
For senior citizens, Kelkar said the benefit ranges from Rs 3,402 for income bracket of Rs 150,000-200,000 to Rs 77,196 for income above Rs 10 lakh.
The panel has suggested doubling of the Income Tax exemption limit to Rs 100,000 and a two slab personal Income Tax structure of 20 per cent for income of Rs 100,000-400,000 and 30 per cent for income beyond Rs 400,000. It has also raised the Income Tax exemption limit to Rs 150,000 for senior citizens and widows.
Justifying the rationale behind the abolition of standard deduction for salaried class, Kelkar said a large number of perks are available to salaried employees, which are either concessionally treated or fully exempt thereby reducing the effective tax burden.
The perks included conveyance allowances, housing, motor car, medical, telephone and leave travel allowance.
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