West Bengal: Consultants in demand after tweak in tax structure

KOLKATA: Saturday’s Budget left the middle-class Bengalis confused as they failed to conclude if they had gained or lost anything. Tax consultants started getting calls about this new puzzle — new slab with no deduction in personal tax or existing slab with all the deductions in tax.
Arvind Agarwal of GP Agarwal & Associate felt there was a big catch in the new tax proposal.“I personally feel the relief will be marginal but for those who are in higher slabs would get more benefit in the new regime,” he said.
Incidentally, in the new regime, there will be no deductions for housing loan, insurance, PPF or health insurance. “Lot of people here invests in LIC. They have to take a call. There will be no leave travel allowance provision in the new regime. Considering the fact that Bengalis love to travel, this has to be taken into consideration,” he added.
According to N G Khaitan, partner of Khaitan & Company, most people with an annual income of Rs 15 lakh will opt for the new scheme. “If you see the slabs, only if one with Rs 15 lakh income can bring down his income through deductions below Rs 10 lakh will it make sense for them to remain in the old scheme,” he explained.
Leading tax consultant J S Vanzara welcomed the changes in individual tax rates. “It benefits all as many individuals may not qualify for the exemptions or deductions. So lower taxes is welcome for them,” he said. Another tax consultant, Kumarjit Das, was a bit critical about the new regime.
“High-income group will mainly benefit from the Budget announcement. The government has tried to form a Pareto efficient tax regime but in this era of stagflation, this may not be successful and may also create social insecurities,” he said.