Pensioners demand reduction of income tax burden

The Orissa Retired Government Employees' Association (ORGEA), an apex body of over two lakh state pensioners, has urged Union finance minister P Chidambaram to reduce the income tax burden on senior citizens who are required to carry a bigger tax liability in the 2005-06 annual budget proposals compared to the previous year.

In a statement here, the ORGEA said as per the budget proposals, a senior citizen with an annual income of Rs 1.60 lakh would have to pay income tax of Rs 2,000 although he was not paying anything during 2004-05.

This burden increased progressively and for an annual income of Rs Two lakh the tax liability would be Rs 10,000 against Rs 3,000 during the current fiscal, the statement issued by the orgea president D.P.Singh and working president S.B.Patnaik said.

A senior citizen with an annual income of Rs. 2.5 lakh would have to cough out Rs. 20,000 now towards income tax as against Rs. 13,000 during 2004-05.

The statement said that it was an irony that while other sections of the society had benefitted from the new proposals, pensioners and senior citizens had been made to pay more income tax.

Pointing out that people save from their earnings during their working days to sustain themselves in old age, the statement said the concept of encouraging savings through tax relief could not be applied to senior citizens since they could not have any surplus savings.