Expert Answers: Some relief likely on personal taxes

NO TAXES: Amitabh Singh, Partner & Country Leader for Human Capital, Global Mobility & Employment Taxes, E&Y answers tax-related queries.

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Keywords: Tax, Personal Finance

Shamik: Why is there double taxation for NRIs? It can be a painful process. Please give your inputs.

Amitabh Singh: Double taxation happens when two countries simultaneously exercise their right to tax a particular income. This is unavoidable in the current globalised economy as all countries fiercely protect their sovereign rights to tax. The pain is sought to be mitigated by countries entering into Double Taxation Avoidance Agreements (tax treaties).

Shreika: Petrol prices have gone up and I find that the govt sticks to the age old limit of Rs 800 for two-wheelers and Rs 1400 for cars which is now a pittance . Also the HRA is very low when you compare to the standards of living. Is there any chance of expecting more?

Amitabh Singh: The old limits are now gone as these are now subject to Fringe Benefit Taxes. I agree with your observation on HRA and believe that a higher percentage of the basic salary should be made exempt. However, we are not expecting any such tinkering in the current Budget.

Ravish: What are the tax instruments that single, employed women can invest in order to earn tax rebates?

Amitabh Singh: There are many instruments described under section 80C of the Income Tax Act which allows deductions.

Liston M. Dias: I wanted to know if there is any book for Income Tax for NRIs.

Amitabh Singh: There are many books on taxation of NRI, there are many web-sites also. Just "Google"

N Raja: Why not abolish Personal Income Tax? Reports suggest only 1 pc of the population pay Personal Income Tax. Moreover, the cost of collecting this amount doesn't prove economically viable. Instead, CBDT can think of alternate means.

Amitabh Singh: Personal Income Tax accounts for significant revenues for the government. Moreover, the government wants per-capita income to rise and thus bring more people into the tax net. I remember reading reports that India's cost of collection is amongst the lowest in the world.