As good as it gets

Fresh outlook

The Union Budget 2017-2018 is out and it has more than its share of claims to fame. Presented on February 1 for the first time in independent India, this was also the first time in 92 years that the Railway Budget was presented with the Union Budget. And it came close on the heels of a move that signalled the end of money as we knew it — demonetisation.

     So naturally expectations were high and Finance Minister Arun Jaitley had the tough task of meeting as many of these as possible.

One of the significant announcements in the Budget was that the rate of income tax on income between Rs 2.5 lakh and Rs 5 lakh was reduced to 5 % from the current 10%. This would reduce the tax liability of all persons below Rs 5 lakh income either to zero (with rebate) or 50% of their existing liability.

This is a commendable move in itself and would bring much-needed relief to the salaried class who, according to the Finance Minister, contribute the most to tax revenue.

     However, youngsters in the city say that they had been hoping for something quite different.

“Though this reduction in the tax percentage was helpful, I would have preferred an increase in the tax slabs where an income of upto Rs 4 lakh would have been exempt from tax,” says Syed Suhail Ahmed, an MNC professional.

     “That would have increased our take-home too. With GST set to be introduced, certain things like eating out will most probably get more expensive. So our disposable incomes should have risen proportionately,” he adds.

“I also feel that the income tax rebate for incomes up to Rs 5 lakh should have been increased. That too would have increased the money in our hands,” he says.

According to the Finance Minister, while the taxation liability of people with income up to Rs 5 lakh is being reduced to half, all the other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs 12,500 per person.

Says Shruthi M S, assistant professor at Jain College, “A number of laudable steps have been taken in this Budget — there has been a thrust on the farming and agriculture sector, digitisation of the nation, bringing in transparency in transactions and so on.”

She goes on to add, “But the sentiments of the common man were not really taken care of. There was an across-the-board expectation of a rise in the tax slabs which would have been very beneficial in increasing the demand and consumption in the
economy. ”

Suchetana A is inclined to agree with these views. The college professor feels that while the Budget has covered pretty much everything, not much has been done to meet the aspirations of the middle class population.

      “The reduction in tax percentage gives only a slight relaxation to the common salaried person. An increase in tax slabs was widely expected this time but that did not happen. Even the corporate taxes have not seen a big change. However, the move to prohibit cash transactions of above Rs 3 lakh is a good move and will help the government to increase their tax revenue,” she says.

“Introducing a one page tax filing form for taxable income under Rs 5 lakh is also a timely step. It will make the process of filing returns much less cumbersome and people will be able to do it on their own; without having to depend on anyone,” she adds.

There are also others who feel that ‘something is better than nothing’. “We are a country that is in the midst of tectonic changes, in all aspects and spheres,” says Niveditha Krishnan.

      “But everything can’t happen at one go. As Arun Jaitley himself said, India is basically a non-tax compliant society and work needs to be done to widen the tax base. So to let go off a huge chunk of this revenue is not feasible right now. As more and more people come into this bracket, the existing ones can expect more and more relief. And a halving of income tax is good enough for me as of now,” she adds.