ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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TAXATION-Cost of Higher Exemption Level

industrial policy so that the prevailing confusion is cleared. Fernandes would probably like to avoid such an exer- cise. But he is likely to be under pressure from different quarters to do so. Such a statement of policy would not necessarily mean that the ONE of the least unexpected and widely acclaimed proposals of the Budget for 1977-78 was the raising of the exemption limit for personal irfcome-taxation from Rs 8,000 to Rs 10,000. To assess the revenue implica tions of this move, one needs data on income-tax collections. However, the latest available data relate to the assess ment year 1974-75. At that time, the exemption limit was Rs 5,000. In the Budget tor 1974-75, this was raised to Rs 6,000 and, subsequently, further to Rs 8,000. Also, in the 1974-75 budget, salaried tax-payers were allowed a standard deduction of 20 per cent of the first Rs 10,000 of salary income and 10 per cent of the balance exceed ing Rs 10,000, subject to a maximum of Rs 3,500. Now, with the exemption limit at Rs 10,000, the effective exemp- tion stands at Rs 12, 000. In addition, specified savings qualify for rebate at 100 per cent upto Rs 4,000.

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