Thursday, March 31, 2011

Latest updates

Greetings,
For over eight days our websites www.rrewa.org  & www.bharatpensioner.org  were off due to severe Hacking attack. After several days hard work, we could retrieve it,  but some Data is lost in the process. We will be uploading it within few days. Still you find some thing missing pl. inform. Those of our visitors who registered from 07.03.2011 to 26.03.11 will have to register again.It may take a few days more for complete  restoration
We are extremely sorry for the inconvenience.
Recently following new documents have been uploaded:


Friday, March 25, 2011

6% additional Dearness allowance to Central Government Employees wef 01.01.2011

Bribing of voters at the cost of Aam Admi in Tamil Nadu


AIADMK manifesto for April 13 Assembly elections on Thursday promised 20 kg of 
free rice for ration-card holders, laptops for students from classes XI, free 
fans, mixers and grinders to all and mineral water to BPL families.
In a bid to woo women voters, Ms. Jayalalithaa promised four gms of gold for 
 ‘Mangalsutra’ free of cost to poor, besides cable TV connections at subsidized rates.
AIADMK if voted to power would provide free bus passes to all citizens aged over 
58, a sugarcane procurement price of Rs 2,500 a tonne, a restructured health 
insurance scheme for all and a special scheme for the welfare of Sri Lankan 
Tamil refugees, now lodged in camps across the state, she said.
Four sets of uniform and footwear for students, 20 litres of mineral water a day 
to Below Poverty Line families, six months  maternity leave for women and Rs 
12,000 as pregnancy allowance have also been promised.
The party assured assistance ranging from Rs 1000-Rs 5000 for students from 
class X onwards in government and private schools, with a view to bring down the 
school drop-out rate.
Old aged persons abandoned by their wards would be lodged in homes and provided 
three meals a day, free medical aid and library facilities, according to the 
manifesto.


Comments by  S. C. Maheshwari : Friends,
No doubt it is an attempt to bribe the voters & ultimately Aam Admi will have to foot the bill. A silver lining also is emerging. after years of hard work by AISCCON, RREWA & Bharat Pensioners Samaj, at last Politicians have  started  realizing the vote value of Seniors. Reference to Seniors in General & Rail budgets too indicate the same. View  ppt to know how much is Elderly  vote value. Link : http://dl.dropbox.com/u/22740206/Elderly%20vote%20power.ppt



Tuesday, March 22, 2011

CABINET APPROVED 6% DA TO CENTRAL GOVERNMENT EMPLOYEES...

Flash News...

CABINET APPROVED 6% DA TO CENTRAL GOVERNMENT EMPLOYEES... 

DEARNESS ALLOWANCE HIKED BY 6% TO CENTRAL GOVERNMENT EMPLOYEES FROM JAN-2011... 

The Union Cabinet committee today decided to increase the Dearness Allowance by 6% to Central Government employees. 

Hike in the Dearness Allowance (DA) will be from 45% to 51% w.e.f.January 2011. 

Release of first additional instalment of dearness allowance for this year to Central Government employees and Dearness Relief to Pensioners due from Jan-2011 to compensate for essential commodities price hike. 

The revised rates of Dearness Allowance from 1.1.2011 to 28.2.2011 may be paid in cash as arrears and for the month of March may be disbursed with the salary. 

The enhancement of Dearness Allowance is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission. 

Government Order from Finance Department will be published very soon. 

Er. S.C.Maheshwari

Saturday, March 12, 2011

Salaried class which includes Pensioners bears most of tax burden in India


Salaried class which includes Pensioners bears most of tax burden
Numbers of Tax Assessees in India –Financial year 2009-2010 =34085426
Effective tax base is Just 1.5 cr tax payers
Well-to-do professionals pay little tax
MORE  than half  of India's 3.4 crore income tax payers con­tribute  insignificant amounts as tax, with fig­ures ranging from a paltry Rs50  to  Rs1,000  in  most cases. This reduces the effective   tax   base   to around 1.5 crore tax pay­ers, which includes mainly corporate houses and the salaried class, according to   senior   officials    of the    income-tax    (I-T) department. 
Well-heeled independent pro­fessionals, like chartered accountants, doctors, lawyers, big shopkeepers and wholesale traders make up the category of income tax assessees who add to the number of people under the tax net but contribute virtu­ally nothing to the national exchequer. 
Senior I-T officials are of the view that the cost to the depart­ment for maintaining these files would probably exceed the tax collections from this category. 
While even the figure of 3.5 crore income tax assesses is considered small for the size of India's urban population, the fact that the number of effective tax payers is less than half this number makes matters even worse for resource mobilization. Independent professionals and traders with lavish lifestyles are reported to be filing tax returns that reflect incomes ranging from a mere Rs1.5 to RS5 lakh a year. The big cars that they use are bought in the names of business entities. 
"These assesses have been showing withdrawals from their bank accounts of a paltryRs10,000 or so to run their monthly expenses, which just doesn't make any sense," a sen­ior official said. 
Several big retail showroom owners in the Capital are reported to be showing losses on their accounts books. The financial figures indicate that the business should have been shut down as the premises would bring in a huge rent but this is not happening either, an official pointed out. 
Senior officials say there has to be a culture of tax compliance that is missing in India. 
 While tax evasion is wide spread, the I-T department does not have enough manpower or resources to chase all the dodgers and make them cough up the due amounts. Since the black money transactions take place in cash it is difficult to track them down. A single assessing officer could be burdened with as many as 10,000 files and it is difficult for him or her to examine all of them in minute detail.
The extent of tax evasion is evident from the fact that when the investigation wing of the       I-T department conducts raids on the premises of suspected tax dodgers, the income declara­tions result in tax collections of as much as Rs100 crore. In fact a Rs5-10 crore collection is quite common, a senior official said.

According to official figures released, corporate tax collections stand at           Rs 2,78,411 crore, accounted for as much as 83 per cent of the total direct tax collections of Rs 3,36,117 crore during April-February of this fiscal.
          The figure show that while direct tax collections grew by 21 per cent during this period, cor­porate tax went up by 24 per cent. Personal income tax increased by 15 per cent to touch Rs1,12114 crore, which was mainly from the salaried class which includes Pensioners .

Sunday, March 6, 2011

Adverse implications of Direct Taxes Code for Sr.Citizens & Pensioners



     In the budget presented on 28.2.2011 the Finance Minister has announced that the exemption limit for ordinary citizens will be increased to Rs.1.8 lakhs, that persons who are sixty and above will become senior citizens and that very senior citizens of the age of 80 and above will be exempt up to Rs.5 lakhs total income.  He has further stated that these changes would entail a great revenue loss for the Government.
   If one were to read the fine print of the Direct Taxes Code as known at present, it will be seen that in the absence of short-term tax saving instruments with the repeal of present section 80C of Indian Income-tax Act, once the Direct Taxes Code comes  into effect, those assessees who at present avail of investment in short-term tax saving instruments and get an exemption of Rs.1 lakh from their total income for tax purposes, and who may not be in a position to avail of investment in long-term tax saving instruments provided for in the Direct Taxes Code, will be deprived of the same once the Direct Taxes Code comes into effect, since short-term tax saving instruments do not find a place therein.  The tables given will indicate how such assessees will be adversely affected despite the Finance Minister’s announcements, and indeed there will be a revenue gain for the Government and not revenue loss per each such assessee.
   As regards revenue loss consequent on senior citizens of the age of 80 and above having an exemption limit of Rs.5 lakhs, since the number of such persons will be very small(Hardly 5000 Tax payer in 80 & above age group), the loss may not be significant.
   Tables are given below to indicate how additional tax liability will have to be borne by all such assessees below 80 years of age, ranging from Rs.1030 to Rs.9270 per assessee as shown therein.
      To remedy the situation, it is suggested that:
(i)                  In the case of senior citizens only, short-term tax saving instruments as at present in section 80C may be continued and included in the DTC.
                                              OR
(ii)                The exemption limit in the case of senior citizens may be fixed at Rs.3.5 lakhs, at least to restore the status quo in their case, at the present level of Taxation.
  




TABLE I
        Tax liability in the case of ordinary assessees below the age of 60       
                      (* The figures are with education cess of 3 %)     
                                   Tax in Fin.Year 2010-11         With no short-term
                                                                                      Tax saving instruments
Total income         Tax without         Tax with benefit     Tax under DTC
                             Benefit of 80C          of 80C             with Rs.2 lakhs basic
                                                                                        Exemption limit

1.6 lakhs                   --                           --                            ---
1.7 lakhs              1030                           --                            ---
1.8 lakhs              2060                           --                            ---
1.9 lakhs              3090                           --                            ---
2.0 lakhs              4120                           --                            ---
2.1 lakhs              5150                           --                           1030
2.2 lakhs              6180                           --                           2060
2.3 lakhs              7210                           --                           3090
2.4 lakhs              8240                           --                           4120
2.5 lakhs              9270                           --                           5150
2.6 lakhs             10300                          --                           6180
2.7 lakhs             11330                         1030                       7210
2.8 lakhs             12360                         2060                       8240
2.9 lakhs             13390                         3090                       9270
3.0 lakhs             14420                         4120                     10300
3.1 lakhs             15450                         5150                     11330
3.2 lakhs             16480                         6180                     12360
3.3 lakhs             17510                         7210                     13390
                                              …………….
5.0 lakhs             35020                        24720                    30900


The figures in bold letters indicate how ordinary assessees who at present avail of 80 C benefits will be adversely affected once the DTC in its present form as known comes into effect, in the absence of short-term tax saving instruments since they will have to pay additional tax of Rs.6180 per assessee, which indeed is a revenue gain for Government.



TABLE II
                 Tax liability in the case of assessees between ages of 60 and 65        
                      (* The figures are with education cess of 3 %)     
                                   Tax in Fin.Year 2010-11             With no short-term
                                                                                      Tax saving instruments
Total income         Tax without         Tax with benefit     Tax under DTC
                             Benefit of 80C          of 80C            with Rs.2.5 lakhs basic
                                                                                        Exemption limit

1.6 lakhs                   --                           --                            ---
1.7 lakhs              1030                           --                            ---
1.8 lakhs              2060                           --                            ---
1.9 lakhs              3090                           --                            ---
2.0 lakhs              4120                           --                            ---
2.1 lakhs              5150                           --                            ---
2.2 lakhs              6180                           --                            ---
2.3 lakhs              7210                           --                            ---
2.4 lakhs              8240                           --                            ---
2.5 lakhs              9270                           --                            ---
2.6 lakhs             10300                          --                           1030
2.7 lakhs             11330                         1030                       2060
2.8 lakhs             12360                         2060                       3090
2.9 lakhs             13390                         3090                       4120
3.0 lakhs             14420                         4120                       5150
3.1 lakhs             15450                         5150                       6180
3.2 lakhs             16480                         6180                       7210
3.3 lakhs             17510                         7210                       8240
                                              …………….
5.0 lakhs             35020                        24720                     25750

   The above table indicates that even persons in the age range 60 to 65 who at present avail of 80C tax saving instruments will have to pay an additional Rs.1030 as tax per assessee, which again is a revenue gain for the government.








TABLE III
                 Tax liability in the case of assessees  between ages of 65 and 80        
                      (* The figures are with education cess of 3 %)     
                                   Tax in Fin.Year 2010-11             With no short-term
                                                                                      Tax saving instruments
Total income         Tax without         Tax with benefit     Tax under DTC
                             Benefit of 80C          of 80C            with Rs.2.5 lakhs basic
                                                                                        Exemption limit

2.4 lakhs                --                            --                            ---
2.5 lakhs              1030                         --                            ---
2.6 lakhs              2060                         --                           1030
2.7 lakhs              3090                         --                           2060
2.8 lakhs              4120                         --                           3090
2.9 lakhs              5150                         --                           4120
3.0 lakhs              6180                         --                           5150
3.1 lakhs              7210                         --                           6180
3.2 lakhs              8240                         --                           7210
3.3 lakhs              9270                         --                           8240
3.4 lakhs             10300                        --                           9270
3.5 lakhs             11330                     1030                       10300
3.6 lakhs             12360                     2060                       11330
3.7 lakhs             13390                     3090                       12360
3.8 lakhs             14420                     4120                       13390
                                      …….and so on
5.0 lakhs             26780                   16480                       25750

   The above table indicates that even persons in the age range 65 to 80 who at present avail of 80C tax saving instruments will have to pay an additional Rs.9270 as tax per assessee, which again is a revenue gain for the government.

    Surely, it is not the intention of Government to rope in even those assessees/senior citizens, who avail of present 80 C short-term tax saving instruments and who at present have no or less tax liability into the tax net, after the DTC comes into effect.
    To remedy the situation, it is suggested that:
(iii)               in the case of senior citizens only, short-term tax saving instruments as at present in section 80C may be continued and included in the DTC.
                                              OR
(iv)              the exemption limit in the case of senior citizens may be fixed at Rs.3.50 lakhs, at the present level of Taxation,  at least to restore the status quo in their case.