Business Today
Loading...

Union Budget 1970: When Indira Gandhi refused to increase tax exemption limit

Union Budget 1970: The newly-appointed Finance Minister Nirmala Sitharaman is all set to present the Union Budget on July 5. It remains to be seen if she will take a leaf out of Gandhi's book or follow the footsteps of her recent predecessors when it comes to tax exemption

twitter-logo BusinessToday.In        Last Updated: July 5, 2019  | 09:10 IST
Union Budget 1970: When Indira Gandhi refused to increase tax exemption limit
Union Budget 1970: Indira Gandih on tax exemptions

Union Budget 2019: Former Prime Minister Indira Gandhi served as the Finance Minister for a year in 1970. She presented the Union Budget for the year 1970-71. What remains striking in her budget speech is her refusal to increase the tax exemption limit that would have provided some relief to the lower income groups.

In her speech she acknowledged that she was suggested from time to time to increase the exemption limit as a measure of relief to the lower income groups and to streamline better tax administration. Gandhi also acknowledged that by removing small assesses from taxation, income tax officers would be able to devote more time to bigger cases.

"Suggestions have been made, from time to time, that the exemption limit for income tax should be raised as a measure of relief to lower income groups and in the interest of better tax administration. It has been urged that by removing a large number of small assesses from the scope of income taxation, Income-tax Officers will have more time to devote to larger cases where the gain to revenue would be correspondingly greater," she said.

FULL COVERAGE:  Union Budget 2019

However, she further said that the exemption of Rs 4,000 to Rs 4,800 cannot be considered unreasonably low. "In a poor country like ours, the present exemption limit which varies from Rs 4,000 to Rs 4,800 in accordance with the number of dependents, cannot be considered unreasonably low in relation to the average level of income in the country," she said.

Keeping in mind that that such a move would make the work of Income Tax officials easier, she said, "I propose to do away with the present system where exemption is related to the number of dependents. In future, a uniform exemption limit of Rs 5,000 will apply in the case of all non-corporate assesses irrespective of whether they are married or have any children. This will make for greater administrative simplicity and give a small benefit to all income tax-payers." It must be mentioned that that there were 11 slabs for income tax during 1970-71.

The newly-appointed Finance Minister Nirmala Sitharaman is all set to present the Union Budget on July 5. It remains to be seen if she will take a leaf out of Gandhi's book or follow the footsteps of her recent predecessors when it comes to tax exemption.

Also read: Union Budget 2019: When and where to watch LIVE coverage of budget

Also read: Budget 2019 LIVE updates: Nirmala Sitharaman to present her maiden budget today; here's what to expect

Also read: When Indira Gandhi took a jibe at smokers in budget speech

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close