The Union budget has brought smiles on the faces of income-tax payers of Gujarat. With the proposed hike in income-tax exemption limit, nearly 24 lakh Gujaratis, who are income-tax payers, will be able to save Rs1,000 each. Senior citizens among them will be able to save Rs1,500 each.
Put in a different way, the hike will result in collection of direct tax from Gujarat going down by at least Rs240 crore. Thus, the tax-payers will be richer by this amount. However, income-tax officials are confident that like previous years, the number of income-tax assessees will increase this year also.
The new exemption limits are Rs2.4 lakh for senior citizens, Rs1.9 lakh for women and Rs1.6 lakh for others. As on March 31, 2009, the income-tax department in Gujarat had a total of 27,40, 230 tax-payers. Individuals and Hindu undivided families account for a big chunk of the tax-payers. According to sources in the I-T department, around 50% of the revenue comes from these two sources.
The number of income-tax payers or assessees in Gujarat has grown by almost 34% in financial year 2008-09 compared to 2000-01. In recently-concluded financial year, the number of income-tax payers in the state surged to 27,40,230, while in 2007-08 it was 26,87,994.
“The budget has brought some respite to tax-payers in another way. A major relief for relatively better-off sections of society is the increase in the exemption limit for wealth tax, which has been hiked by 100% from Rs15 lakh to Rs30 lakh. It was a long-awaited demand,” said Jayesh Sharedalal. He added that the budget has also simplified many puzzling laws and anomalies for tax-payers. The budget has also eliminated many procedural anomalies.
However, Durgesh Buch, chartered accountant and secretary of Gujarat Chamber of Commerce and Industries (GCCI) said that the budget is almost depressing. He said that the little happiness the budget has brought about is by way of abolition of fringe benefit tax (FBT) and commodity transaction tax. The latter will help farmers by facilitating better price discovery. He said, for tax-payers at large the only good thing is that the procedures have been made a bit easy.
According to I-T officials, the department’s task of maintaining revenue collection will be difficult. “People’s income has dipped. There have been salary cuts and private companies are not going to increase salaries because of recession. We had to strive a lot last year to achieve the target and this year too the situation will be difficult due to hike in exemption limit,” said an I-T officer.
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