Union Finance Minister Yashwant Sinha, who rolled back LPG prices under political pressure on Saturday, ruled out any change in tax exemptions on savings in the Budget, saying unnecessary hype was being created that middle class are being adversely affected by the proposal.
"I myself was a government employee. I can feel that the tax exemptions level announced in the Budget are not harsh. It was I who increased the exemption level on those drawing salaries of upto Rs one lakh to 30 per cent", Sinha told reporters after a 90 minute post-Budget meeting with board of the RBI.
Stating that lot of hype has been created on reduction in exemption levels in saving instruments, Sinha said, "Try to understand that out of a population of 100 billion people only 3.65 lakh people have taxable income above RS five lakh."
The finance minister asserted that the interest of the middle-class had always been taken care of.
He justified the proposals to reduce exemption levels of those drawing salaries between Rs 1.5 lakh and Rs five lakh a year from 20 per cent to 10 cent and to nil for those drawing annual salaries above Rs five lakh.
On both subsidies as well as tax proposals, Sinha said there were some, who felt the economic reform has come to a halt but when their pockets are touched they do not like it. Bureau Report