From Rs 7 lakh to Rs 12 lakh, it is indeed a giant leap for middle class taxpayers who do not want to avail themselves of deductions and exemptions in their income tax returns for the AY 25-26. And for those not willing to forego these deductions and exemptions, as well as those earning more than Rs 12 lakh, the realignment of tax slabs spells a substantial reduction in their income tax burden.

Together, with these twin measures, intuitively, the entire middle class has been left off the tax hook. Senior citizens who are left to fend for themselves with pension and interest on deposits normally don’t like to avail themselves of the tax benefits linked to investments or saving schemes. For them, the liberalised ceiling of Rs 12 lac is a manna from heaven.

The middle class’s long-standing grievance has been that it has been made to contribute to the national exchequer disproportionately. While the rich can take taxes, both direct and indirect, in their stride, they have all along been let off with just a slap on their wrists. Wealth tax, which targeted them, was abolished in 2015 on the irrational ground that the cost of collection outweighed the revenue therefrom, little realising that the tax was not on all the assets comprehensively, with the notable exclusions being bank deposits and shares.

Estate duty remains in a suspended animation since 1985 on the even more specious and irrational ground that sometimes the legal heirs had........

© Free Press Journal