Letter to BS: Removal of direct tax exemptions is adding to the burden

The finance minister has provided an alternative route of adhering to the existing tax rates to retain the benefit of tax deductions and exemptions.

This refers to the editorial, “Glide path for direct tax” (February 3). The architecture of direct tax exemptions and corresponding investments have been developed over many years. The purpose of this system is to provide benefits to the related industry. For example, investment in 54EC bonds to save on long-term capital gains tax (LTCG) on the sale of property provides low-cost funds to Rural Electrification Corporation and the National Highways Authority of India. While it can be argued that the structure of exemptions needs simplification, the total obliteration of the existing system doesn’t amount to simplification but points to a