Union Budget 2011-12 Attracts Mixed Response From “Common People”

The Union Budget 2011-12 today received a mixed response from the ‘common man’ who is happy over raise in income tax exemption limit but feels that his hopes have been marred with increase in taxes on health services and air travel, among others.

New Delhi, Feb 28: The Budget gives some relief to general tax payers with Finance Minister Pranab Mukherjee enhancing the tax exemption limit by Rs 20,000 to Rs 1.80 lakh.

The measure will provide a uniform tax relief of Rs 2,000 to every individual tax payer, besides moving closer to Direct Tax Code (DTC) rates.

”The new tax slabs are good news for the common man because it will lead to more cash in hand,” Tanmay Bhatt, a software engineer, said.

Senior citizens, whose qualifying age has been reduced from 65 years to 60 years, have also received additional benefits. The tax exemption limit for them has been enhanced from Rs 2,30,000 to Rs 2,40,000.

Besides, a new category of Very Senior Citizens, 80 years and above, has been created who will be eligible for a higher exemption limit of Rs 5,00,000.

Sixty-two-year-old Ramesh Chand said, ”The Budget is laudable.”

Now people of my age will also be able to avail some benefits.” A reduction in the excise duty on hybrid kits, developed indigenously for the conversion of fossil fuel vehicles into hybrid vehicles, and their parts from 10 per cent to 5 per cent has been proposed.

”This is good news. I am happy that government is thinking of the environment. This step will hopefully increase the number of users of eco-friendly vehicles” Gagan Goel, a member of Eco-club in his school, said.

However, the proposed hike of five per cent in medical bills will add to the woes of the general public.

Centralised air conditioned (AC) hospitals with more than 25 beds and even diagnostic service providers are brought under 10 per cent service tax. The effective service tax would be 5 per cent, as there is a 50 per cent rebate. This would result in the patients paying more.

”This step is surely not welcome. Instead of reducing the burden of medical expenses on us, the government has added to our problems,” Shweta Gupta, a housewife said.

Earlier, insurance coverage patients were under the service tax bracket, but in this budget the government has expanded its scope of taxing by bringing even non-insurance patients under the tax bracket.

In regard to air travel, the Budget 2011-12 has raised service tax on domestic as well as on international air travel by Rs 50 and Rs 250 respectively.

Domestic air travel in higher classes, however, would be taxed at the standard rate of 10 per cent.

”I am worried now. I have to travel a lot because of my work for which the expense is taken out from my earnings. The Budget will lead to a spike in my expenditure,” Rajnish Thakur, a businessman, said.

The Budget seems to have neglected the womenfolk also with no sops for them. The exemption limit for women tax payers remains unchanged at Rs 1.9 lakh. They will pay 10 per cent tax on income between Rs 1.9 lakh and Rs 5 lakh; 20 per cent between Rs 5 lakh and Rs 8 lakh; and 30 per cent for income above Rs 8 lakh.

”There is nothing for us. It seems the government forgot us totally,” Rekha Sharma, a school teacher, said.



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