The Finance Minister should restore Standard Deduction to the salaried class who pay income-taxhonestly to the last rupee. Standard Deduction isakin to business expenses. Standard deduction was meant to compensate salaried people for the fact that businessmen paid income-tax only on their netincome after deducting business expenditure. Before Standard Deduction was introduced in1974-75, salaried tax-payers were allowed separatedeductions for employment-related expenses suchas expenditure on purchase of books, publicationsetc. and other expenses incurred in connection withthe performance of duties which earned them salaryincome. To simplify assessment procedures, theseseparate deductions were substituted by a Standarddeduction as a certain percentage of income. Notallowing standard deduction is tantamount to sayingthat one need not spend anything to earn salaryincome. In 1974-75, the maximum Standard Deductionwas Rs.3,500. Considering inflation rate, the FMshould allow a Standard Deduction of 40 % or amaximum of Rs.70,000/-.
S. RAGHUNATHA PRABHU M.Com.,C.A.I.I.B
SPECIAL ASSISTANT
STATE BANK OF TRAVANCORE
PUNNAPRA-688004 ( ALAPPUZHA ) /
Amaraavathy Cottage
Thiruvampady.P.O.
Alappuzha-688002
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