M A I L B A G

Tax structure should be rationalised

Union Finance Minister P. Chidambaram’s proposal to cut the personal tax rate has failed to cheer the lower middle class. The tax structure should be rationalised in the interest of both the government and the common man. It is ridiculous that while there are three slabs for the taxable annual income — Rs 1 lakh to Rs 3 lakh — there is only one slab for income above Rs 3 lakh.

Its rationale could be appreciated if one considers the fact that most industry honchos today get salary in the range of Rs 1 crore to Rs 20 crore a year. Also, many executives and officers get over Rs 3 lakh. Therefore, I suggest six slabs for tax purposes — 15 per cent for income from Rs 3-5 lakh; 30 per cent for Rs 5-10 lakh; 35 per cent for Rs 10-25 lakh; 40 per cent for Rs 25-50 lakh; 50 per cent for Rs 50-100 lakh and 60 per cent for income above Rs 1 crore — with all types of deductions and benefits and wealth tax withdrawn.

I don’t advise taxing people in the Rs 1-3 lakh range. For, they already find the going difficult — Rs 5,000 for HRA or installment of the house; Rs 3,000 for telephone and mobile; Rs 3,000 on conveyance; Rs 5,000 on education of two children; Rs 3,000 forced savings like PF, leaving Rs 6,000 for kitchen, health care, clothes etc.

If Mr Chidambaram levies income-tax on this class, their kitchen budget will be affected. This class is already paying taxes like road tax, toll tax, service tax etc.

BHARTENDU SOOD, Chandigarh

DA increase

Employees feel happy when the government announces an increase in the dearness allowance of the employees twice a year despite the increase in the employees’ liability towards the income tax. The DA increase is result of the government’s failure to check price rise.

Ironically, however, both the employees and the government celebrate their own failure to hold the price line. A 79 percentage (50+29) increase within a span of 10 years is indeed alarming. The best way for the government is to check price rise or make DA tax free.

H.M. VYAS, Jalandhar

Medical allowance

The Punjab government has increased medical allowance of its employees and pensioners from Rs 250 to Rs 350 a month. The government grants the same amount of medical allowance to a new employee and a pensioner (senior citizen) whose medical expenses are much more because old age in itself is an infirmity and disease.

Like old age allowance to pensioners at 65 and 75 years, there should be suitable increase in their medical allowance also.

HUKAM CHAND GOYAL, Headmaster (retd), Bathinda

Reduce the stress

The way our armed forces personnel have been shooting one another calls for an in-depth study of the underlying problem. Basically, such desperate acts seem to be a fallout of working continuously without rest, poor service conditions, dilution of dignity in the present money-driven society, problems at home and so on.

It is time to improve the service conditions of the armed forces to enable them maintain a second home for the separated families. This is particularly important today as the joint family system has crumbled. The political masters would do well to avoid sending wrong signals that appear to negate the sacrifices our soldiers have been making in fighting terrorism. 

Air Cmdr RAGHUBIR SINGH (retd), Pune

LIC pensioners

The Central government discharges its legal and moral responsibility in revising its pensioners’ pension while revising its employees’ salaries. But the Life Insurance Corporation of India (LIC), was unfair to its pensioners in 1997 and 2004.

The LIC has also not given any incentive on the auspicious occasion of the LIC golden jubilee (Sept 1, 2006). Only the employees have been considered for this. It has also rectified the Gratuity Act from Oct 1, 1997. The Centre had done it on Jan 1, 1996.

In my opinion, it is a constitutional disparity as the government considers its pensioners at par with the employees whereas the LIC acting contrary to this.

RAMESH CHANDER SACHDEVA, Panipat