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Wanna be (more) Corrupt?

June 23, 2011 Leave a comment

There is a proposal in Direct Tax Code to hike Medical Allowance limit from 15000 to 50000.

Many people are not able to arrange valid bills totaling 15000. And therefore get fake bills by paying some amount to drug seller. As the allowance is increased to 50000, maximum people will find it difficult to get authentic bills. So the easiest way out will be to get fake bills by paying some ‘charges’. We save tax and drug seller gets additional money. So both are happy!

If we consider arranging fake bills as corrupt-action, then hiking the allowance will definitely increase corruption.

Government’s reasoning for increasing the allowance is increase in medical treatment cost. However, the same logic applies to Conveyance Allowance; then why not increase it from 800 to 2000? And if no bills are asked for Conveyance, why to ask it for Medical Allowance?

It is also expected that Sodexo Coupons will continue the tax exemption. Conceptually (and legally) the coupons should be used for ready to eat food at or near workplace. However, in market you can purchase groceries and even cosmetics. Some shops can encash your entire coupon booklet at some nominal commission. Is it not corruption?

If the government is planning to revamp the Income Tax rules through DTC, why not scrap all allowances and simplify the payroll structure? Instead of allowances, the tax exempt income limit can be increased so that everyone gets the benefit without requiring a ‘jugaad’.

Government’s response to the scams exposed recently indicate that the Government is in no mood to curb corruption. However, can we at least expect them not to entice common man to be (more) corrupt?

Categories: Uncategorized