ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Demolishing Direct Taxes

DIRECT TAXES, especially taxes on capital, viz, wealth tax, estate duty and gift tax, seem to have received a hard knock from members of the Consultative Committee of Parliament attached to the Finance Ministry at its meeting held last Monday. One member of the Opposition recommended total withdrawal of estate duty while another (a former Minister of State in the Ministry of Finance) thought that wealth tax, gift tax and estate duty together should be scrapped. Income-tax too received its share of attention and attack. Several members asked for raising the exemption limit from Rs 15,000 to Rs 18,000 and reducing the maximum marginal rate from its present level of around 70 per cent to 50 per cent While not conceding the demands, the Finance Minister showed his sympathy for the suggestions by promising to bring forward amendments to reduce the estate duty burden substantially. The question of raising the threshold for estate duty is already under examination, as had been indicated at the time of presentation of the last Budget. Further relief, it appears, will now be provided by bringing the method of property valuation for estate duty on par with that provided for wealth tax. The suggestion for raising the income-tax exemption limit also evoked a sympathetic response from the Finance Minister. Only, he thought that this ideal would take some time to achieve.

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