India Union Budget 2019: Salaried class people, particularly public sector employees, have high hopes from finance minister Nirmala Sitharaman’s maiden budget. Average mid level public sector employee falls in the highest income slab. He is also entitled to avail Rs 40,000 standard deduction in addition to other exemptions and deductions permitted to any other income tax payer. However, unlike their counterpart in private sector, they do not have liberty to structure their salaries that suits their tax saving goals. They complained that the standard deduction was offered by former finance minister Arun Jaitley by withdrawing two other deductions on account of medical expenditure and conveyance expenses.
“At my level, the effective income tax rate works out to be 31.2%, which is very high,” said Vivek Kumar, who is employed with a central PSU in NCR region.
“In addition to paying income tax, I’m required to pay multitude of indirect taxes on my consumption. Applicable GST rate on a large number of items is 18%. I also pay sales tax and excise on purchase of fuel like petrol and diesel, therefore effective tax incidence on my income works out to be around 50% of my total income,” forty-two years old Vivek Kumar told Financial Express Online. – Financial Express