Pensioners should be exempted from paying tax to the government - DiscussMembers,
Government employees are the very sincere taxpayers of our country. I feel that the retired government employees drawing pension should not be asked to pay taxes to the government. Tax exemption should be like an incentive given to the retired government staff. As it is, they are drawing only 50% of the salary they have last drawn.
What I propose is - Government should do away with collecting tax from the pensioners. Alternatively, they should consider different formulae to levy tax from the pensioners.
Mostly all the retired government servants would be the senior citizens. Now the tax exemption for senior citizen is like this:
For first 3 lac - Exempted from tax. ,
From 3 lac to 5 lac - 10 percent tax,
From 5 lac to 10 lac - 20 percent tax .
From 10 lac onward - 30 percent tax.
Supposing a pensioner earns 5 lac annually. He needs to pay a tax of Rs. 20,000 per annum (10% of 2 lacs)
Supposing a pensioner earns 7 lac annually. He needs to pay a tax of Rs. 20,000+40,000 =60,000(10% of 2 lacs, and another 20 percent for next 2 lacs)
I think, it is too much for the pensioners to pay a sum of Rs. 60,000 from Rs, 7 lac. (Almost 8.5 percent of the total income)
What I suggest is - Either govt should do away or reduce it proportionately.
A pensioner earning Rs. 5 lac annually should pay only Rs. 10,000 (5 % of two lacs)
A pensioner earning Rs. 7 lac annually should pay only Rs. 10,000 + 20000 = 30,000 (5 percent for the first 2 lacs, and 10 percent for the next 2 lacs)
The Government should create a separate category as pensioners tax and levy only very minimum tax.
Else they should fix a fixed rate of tax, say ONE percent of their total income. If fixed, a pensioner drawing 1 lac would pay the tax of Rs. 1000/- only. A pensioner drawing Rs. 5 lac annually would pay only Rs. 5000/- only. A pensioner drawing Rs. 7 lac would pay only Rs. 7000/- only. It should be a token pension collected from the retired.
Members, What do you say? Can't our good government consider this privilege to the old and retired government staff? If not for all the government staff, it should be considered for the defence pensioners who have served for our country 24x7.