The finance minister reduced the qualifying age for senior citizens to 60 years; the I-T exemption limit has been raised to Rs2.50 lakh and a new category of ‘very senior’ citizens has been introduced—but experts and commentators feel that much more could have been done
The provisions allocated for senior citizens in Budget 2011-2012 are being regarded as a dampener. Experts and senior citizen commentators view it as a cosmetic change, which wouldn't make much of a difference.
Finance minister Pranab Mukherjee announced the following measures for senior citizens: reduction of the qualifying age to 60 years from 65 years, enhancing exemption limit to Rs2.50 lakh from Rs2.40 lakh and creating a new category of 'very senior citizens', 80 years and above, who will be eligible for a higher exemption limit of Rs5 lakh.
"I would say that we are not only back to where we started from, we have landed behind from square one," said Kaka Samant, GIC Pensioners Association. "It is a good move to bring the senior citizens' age limit to 60 years, but with this (raging) inflation, a marginal increase of Rs10,000 in exemption limit for senior citizens does not serve any purpose," he added.
Moneylife Foundation, in a Position Paper for senior citizens, had suggested that the age limit for senior citizens should be brought down to 60. Also, it was suggested that the exemption amount should be increased for senior citizens. The minister, though did not increase the exemption limit overall, created a 'very senior citizens' category, which will have the benefit of exemptions up to Rs5 lakh.
The recommendations were sent to the ministry along with a forwarding letter by
Dr SA Dave, former chairman of the Securities and Exchange Board of India (SEBI). After the minister's speech today, Dr Dave said, "Of course, reducing the age limit is a good move. But a slight relief in term of exemptions is not much. More could have been done, and more has to be done."
Professor Kanu Doshi, renowned chartered accountant, finance commentator and member of the board of directors of several companies, said, "The tax deduction at source for senior citizens could have been raised from Rs10,000 to Rs25,000. The changes made have been nominal. What we must see is that the elderly get the benefits from these reforms because often, financial institutions and companies are very uncooperative."
Lack of provisions on healthcare has come as a disappointment, because that is the most important concern for the elderly, especially with growing healthcare costs, said Prof Doshi. The Sastry Committee report, which talks of universal access to healthcare, is still sitting on the shelf. Mr Samant said that it is high time the recommendations are implemented, which would prove to be beneficial for the elderly.
Mr Samant also added, "While it is good to make provisions for families living below the poverty line, the bar should be raised to people who are above the poverty line. If the earning member falls ill and goes unattended, the family goes down below the poverty line. The government should stop such disasters from happening and make provisions accordingly."
Finance minister has hiked duty on iron ore export to 20% in order to restrict export and conserve resources. The duty increase would hurt Sesa Goa, the largest private exporter of iron ore from the country
The finance minister today proposed to increase the export duty on all types of iron ore to a uniform 20%, a decision that will hurt iron ore exporters, particularly Sesa Goa.
Sesa Goa is the largest exporter of iron ore in the private sector and the company's stock price lost 7% (about Rs20) to Rs262.30 on the Bombay Stock Exchange today, while the benchmark Sensex closed up 0.69%.
Finance minister Pranab Mukherjee proposed to increase the export duty on "lumps" (one type of iron ore) from 15% to 20%, and the duty on "fines" from 5% to 20%, saying that iron ore is a natural resource that needs to be conserved. "Fines" constitute the bulk of exports from the country.
"The country's exporters of iron ore, those who mainly sell fines, will surely be affected by this increase in duty and Sesa Goa would be adversely hit as most of the company's business comes from the export of fines," Alok Kumar Nemani, analyst at Nomura Financial Advisory and Securities (India), told Moneylife.
Sesa Goa managing director PK Mukherjee declined to comment on the duty hike.
On the other hand, the finance minister has withdrawn the export duty on iron ore pellets, apparently to enhance exports after value-addition. Iron ore is the main ingredient for steel production.
Sajjan Jindal, vice chairman and managing director, JSW Steel, said, “The hike on export duty on iron ore fines and lumps to 20% advalorem is most welcome. I am sure that this will lead to greater value addition at home and encourage the domestic steel industry."
"This duty hike could also cause an increase in iron ore prices," Mr Nemani said.
India, the world's third largest iron ore producer, mined 218 million tonnes of iron ore in 2009-10 and exported nearly half of this. Sesa Goa is the country's largest producer and exporter of iron ore in the private sector. It exports almost 80% of its production, most of which is the "fines" quality of ore.
However, National Minerals Development Corporation (NMDC), another major iron ore producer, would not be affected much as the state-owned company exports only about 5%-10% of its production.
"With this increased export duty on fines, Sesa Goa's profitability would come down by 15%-18%," said an analyst from a Mumbai-based financial services company.
Steel minister Beni Prasad Verma was seeking a control on the export of iron ore, whereas major iron ore producing states like Orissa and Chhattisgarh were looking for a ban on exports.
The analyst said, "India has abundant reserves of iron ore, and export duty has been increased to preserve iron ore for the future."
Salaried taxpayers who do not have other sources of income and whose incomes are subject to TDS will be excluded from filing returns. The decision, which will come into effect from 1st June, will reduce the compliance burden on small taxpayers
New Delhi: In a big relief from cumbersome tax filing process for the salaried class, finance minister Pranab Mukherjee today proposed to exempt them from filing tax returns unless they have other sources of income, reports PTI.
The government will be issuing a notification exempting 'classes of persons' from the requirement of furnishing income tax returns, said the Memorandum to the Finance Bill 2011.
The decision, which will come into effect from 1 June 2011, will reduce the compliance burden on small taxpayers, it added.
Salaried taxpayers who do not have other sources of income and whose incomes are subject to Tax Deduction at Source (TDS) will be excluded from filing returns.
"Therefore, in cases where there is no other source of income, filing of a return is duplication of existing information," the Memorandum said.
Every person whose income exceeds the taxable limit is required to file return of income.