A Letter To Prime Minister Mr. Modi

A LETTER WRITTEN BY COM.VIJAYA SENAN OF IOBOA TO PM, SHRI. NARENDRA MODI......PLEASE READ ON.............

Hon’ble Shri. Narendra Modi ji 26th May 2014
The Prime Minister of India
Government of India
New Delhi 110001

Respected Sir,

Congratulations to your goodselves and to the new Government! Sir, I place the following suggestions on Taxation for the first budget of the new Government led by your goodself.
My suggestions are beyond normal requests that will be made for increasing size of the slabs and reducing the rate of income tax.

HOUSING:

(1) Government is encouraging “HOUSING DEVELOPMENT” by way of giving concession under “direct taxes”. But all such direct Tax concessions are applicable only to those who build/construct out of loans availed from Banks/Financial Institutions. Your goodselves will agree that people should be allowed concessions for Housing Development from out of their own funds also. Hence Tradable Tax Benefit Equivalent Vouchers may be given to all citizens making residential houses/flats as per plan even without Housing Loans.

(2) Though tax concessions are given in “direct taxes”, to encourage housing development, the citizens pay high amount of indirect taxes on materials bought. So, the new Government headed by you may kindly consider concessions on indirect taxes paid on materials bought for housing construction and contracts of labour/services. This will also ensure proper accounting of indirect taxes for which so far there is no cross verification between sellers’ record and invoices given to buyers.

(3) Investments on Solar System by individuals may be treated at par with investments on Housing and Tax concessions may be extended.
PARKING – Tax concessions to enthuse development of parking facilities;
Every Metro and other Tier-II and Tier-III cities are suffering from the problem of vehicle parking space. Hence kindly encourage construction of fee-based “Parking Lots” by extending tax concessions for construction; higher slabs may be given for multi-layered and mechanized parking lots. Tax concessions may also be required not only for constructions but also for the income generated from such new/improved parking lots.

MEDICLAIM:

(a) Health is important social commitment for good governance and encouragement to Mediclaim policies makes people to be in readiness financially by covering the risk with their own funds and Tax concession to Medical policies is one of the best steps for encouraging person Healthcare.
Steps may please be taken to remove the service tax on mediclaim policies which runs counter to the encouragement that government gives by direct tax concessions to the tax payers. Whereas direct tax concession in IT encourages tax payers, the service tax acts as discouragement not only for tax payers but also for those holding mediclaim policies who are non-tax payers. Hence, the service tax on mediclaim policies may please be removed. Senior citizens are worst affected with higher premium due to their age profile and thereby proportionately higher service tax.

(b) Steps may please be taken to cross-subsidise/ hold mediclaim policy premium rates for senior citizens.
(c) Please also consider suitable enhancement for mediclaim deductions under Section 80D in tune with soaring premium rates. In fact, government can consider giving relief in terms of sum assured, say, Rs.5 lakhs per person. Any extra expenditure for mediclaim premium beyond the limit of exemption given in 80D may be allowed to be carried over for tax concession under 80C.
(d) Please also consider Tax concessions for Mediclaim policies and NPS contributions by household employers to their personal employees like Domestic Servant, Gardeners, Drivers etc., to encourage people involvement in betterment of unorganized sector.

MEDICAL EXPENSES:

A family with health problems of any of their family members not only suffers financially, but also suffers psychologically. Their household expenses and incidental expenses become more in addition to medical expenses. Such extra expenses include even loss of income or career or availing leave for attending the kins who are not well. Taxing medical reimbursements under any circumstances is regressive. Hence all taxes on reimbursement of medical expenses by employer may be removed. Such taxation acts as rubbing salt on the wounds of the family, which was psychologically suffering due to health problems of the family member. I am confident tax collection through this provision may not be very high.

The complete removal of taxation on reimbursement of medical expenses will put the medical reimbursements from the employers at par with claims under mediclaim policies. Presently, the medical reimbursements from the employer are taxed subject to certain onerous conditions. Hence I place this request.

In fact in order to cover other expenses which are incidental to a family in addition to expenses on medical treatment the Government can allow 125% or 150% of the medical expenses.

80-DD allows deduction for medical expenses for treatment of dependents with disability. The fixing limit for the purpose of concession under 80-DD may kindly be done away with and full expenses may be allowed. Tax collected under this head will be very negligible and I confident this small sacrifice by the Government will bring relief to families with disabled persons. Further under 80 DD not only expenses on medical treatments of dependents, but also medical expenses on non-dependent parents of “self or spouse” may be allowed.

Under 80-DD Special concession is given for investments for the benefit of the disabled dependents. But on the pre-mature death of the dependent one has to pay tax retrospectively. This condition is also regressive and hence the same may be removed.

EDUCATION:

Currently expenses on education of children are allowed as deductions as per 80-C which reduces concession for taxation of investments. Hence I request you to kindly separate the deduction for educational expenses. The concession / deduction for education expenses may be 125% or 150% of eligible expenses to cover other incidental expenses.
To support development of women education/empowerment, educational expenses for spouse may also be allowed.
The deductions for education expenses may be linked to repayment of educational loans in case of persons who have availed educational loans.
The tax concession for interest on education loans (80-E) may be allowed beyond 7 years also.

Accepting dynamic changes in knowledge, information and technology, one has to keep his knowledge and skill updated. Multi-faceted knowledge is also the need of the hour. Hence educational expenses for part time studies especially in computer education and skills may also be considered.
Swami Vivekananda considered ‘SPORTS’ as one of the important human traits. Expenses on sports education and training to develop the skills of children may also be allowed.

In order to involve people in betterment of unorganized labour, house hold tax payers (individual tax payers) may be allowed tax concessions for their contribution for the education of the wards of their personal attendance like domestic servants, drivers, gardeners etc.

TOURISM:

Tourism generates employment. It is said investment in tourism generates more employment than any other industry / activity. Government encourages tourism through tax concession for reimbursement of ‘Travel Fare’ under LTC. But any LFC / LTC involves other expenses incidental to tours. Hence Government may allow 200% of the eligible Travel Fare as Tax concession or suitably allow Tax concession for other expenses for Lodging and Boarding and Local Site seeing.

Government may kindly consider tax concessions/incentives for all tax-paying persons other than employees also to encourage Tourism. Government may give Tradable Tax Benefit Equivalent Vouchers.

PERKS:

Government may re-visit perk value taxation especially on accommodations in which accommodations are given by the employer not merely for the convenience of the employees but for certain purposes of the employment also. No money is received by the employee but he loses HRA and pays additional sum. In case a Public Sector employee, he also pays licence fee akin to a government employee. Hence perk value taxation on accommodations may kindly be removed. This will also remove the anomaly of treatment between government servants and others under Taxation Law.
The Perk Value Taxation on loans by Employers may be removed, especially when it relates to housing and vehicles (as it helps automobile sector also). Regarding exemptions for other loans, the limits may be linked to one’s Gross Monthly Salary and atleast two months’ salary may be exempted. The notional interest rate may be linked to respective organisation’s Cost of Funds for the previous year certified by the Auditors.

Similarly perk value taxation on personal attendants like gardener, watchman etc., provided by employer in tune with the status of the employee may be kindly avoided. Such steps act as encouragement to make mis-representations of such employment under business though used in houses of the senior employees. Further such taxation may also discourage employment as the senior employee who does not want to pay perk value taxation may be decided not to utilise such offer.
I seek your suitable action. Please oblige.

With regards,
VIJAYASENAN P
Mobile: 09444058950
e-mail id: senanioboa@yahoo.co.in
Residence:
Plot No.15
4th Main Road
V G P layout, Part-I
Palavakkam
CHENNAI – 600 041