23 May, 2011

Lord the guide and counsel

Raman was a silent participant in a discussion in the canteen, about savings taxes. One of them was lamenting that the pitiable Rs.1.5 Lakhs deduction for interest payment, was not even one third of what he was actually paying. Another was cribbing about the low thresholds for savings taxes under Sec 80C. It set him thinking.

When he went back to his seat, he started a bit of googling and reading on finance related subjects. Even when he reached home that evening, his thoughts were still dwelling on finances. He switched on a Finance Channel and was intently watching it. There was fevered discussion about the direction of the market. He had finished his dinner on his way back home itself… for his wife and kids had gone to his in-laws place, for two days.

He heard a muffled knock on his door. He went to the door and found Lord Krishna himself standing there. His brow knit with confusion… who could be fooling him at this time…? He wanted to know who he was. The Lord just told him that he had been thinking of paying him a visit all these days and chose this quiet day, when no-one was around. Raman though unconvinced, let him in. He still wanted to find who this person was, who was playing the fool. The Lord continued," I'm able to see lot of confusion on your face. Why do you worry so much about Finances? You are well provided for”. Now , Raman was stunned. How did he know what was going on… was he really the Lord?

"There are expectations from this budget. Whether it comes to pass, Pranabda will decide. But, let us see what will appeal to a common middle class person. Firstly, the amount of Rs.1 Lakh is seen to be too small. Making it Rs.2 Lakhs would give some relief to many people and at the same time ensure that people save. Secondly, the limit for claiming interest being paid towards a home loan, is now capped at Rs.1.5 Lakhs. That is too low as your friend Sandeep was pointing out today afternoon. With the property prices being what they are, it would be great idea to increase it to between Rs 2.5 Lakhs – Rs.3 Lakhs." Raman was clearly reeling. How does he know about what Sandeep said in the canteen. He looked intently to see if it was one of his colleagues, pulling a fast one on him. But, there was no one who looked like the person before him.

He excused himself and went to pick up a glass of water. When he was back, the hall was empty. He went into his bedroom, bathroom, the other bedroom… they were all empty. Then he went to the kitchen. There he was standing before the small temple, which housed the figurettes & pictures of Gods. How did he come here, he thought to himself. “This is in answer to your prayers that I have come. You have always prayed to me for wealth & prosperity. You have them too…", said the Lord mysteriously. Raman had a hundred questions by now, in his mind.

"Coming back to the subject of what Pranabda can do for the common man, he can give relief by elongating the tax slabs. The 30% tax slab could start from Rs15 Lakhs, instead of Rs 8 Lakhs. The 20% slab itself can come upto Rs.8 Lakhs. Income upto Rs.3 Lakhs can be exempt from Income Tax. Rs.3-8 Lakhs can be taxed at 10%. That would give much needed relief to citizens. Senior Citizens can be given relief upto Rs.5 Lakhs, as they would have paid taxes all their lives, as it is".

"The other area is regarding medical expenses. Sec 80D gives relief upto Rs.15,000 a year for premiums paid towards medical insurance policies. But many of them spend from their pocket on various medical related issues. There is another Rs.15,000/-pa for medical reimbursement which is not taxable. But, in many cases, there are ongoing requirements on medicines and tests. In such cases, it goes much beyond Rs.15,000/-pa. Also, ongoing medical expenses incurred on parents are not covered by medical insurance can also be substantial. Hence, this non-taxable medical reimbursement, should be available till Rs.50,000/-pa ( against bills ) and should cover the family and parent of self and spouse”, the Lord said.

By now, Raman was convinced that this is the Lord. "Longterm conrtibutions to pension funds should similarly be deductible separately ( apart from Sec 80C), to the extent of Rs.1 Lakh. Rs.20,000/-pa in Infrastructure bonds which they introduced in the Budget is a good idea. That could be continued with a limit of upto Rs.50,000/-pa. Conveyance charges that are non-taxable are very low at Rs.800/-pm. That can be increased to Rs.4,000/-pm", the Lord said. None of his colleagues knew so much about Finances. He knew he has met the Creator himself. "Are you saying that all these things will come to pass”, Raman wanted to know.

“These are some of the things the Government could do for it’s people. The Government you have elected exists for itself. It is a parasite. A parasite benefits without giving anything in return. When you all are paying so much tax, it stands to reason to get some benefits. I have just specified what areas are ripe for adjustments. What Pranabda is going to do, you would know by the end of the month”. The Lord went on to say that we get the governments we deserve and more of educated, well intentioned people should come into public service. Raman was hardly hearing it. He prostrated before the Lord. When he got up, the Lord was gone.

Raman was presently staring at the wall. He was disoriented. He had got up with a start and was sitting bolt upright on the sofa. He immediately started searching all the rooms for the Lord. Then it dawned on him that it was all a dream. .. a dream where the Lord himself had outlined what changes would be beneficial for the people. He had tears in his eyes. Even though it was a dream, it touched him. He will not be able to sleep now. He switched on the TV. Pranabda was on air, talking of various reforms to be carried out…

Article by Suresh Sadagopan; Published in Moneycontrol.com on 10/2/2011

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