New Delhi, Dec. 25 (PTI): Stung by the widespread criticism within the ruling BJP, the Kelkar committee on tax reforms is expected to submit watered down final reports on direct tax and indirect taxes, particularly on the politically sensitive issue of elimination of incentives for housing in personal income tax.
The two reports, to be submitted to finance minister Jaswant Singh on Thursday and Friday, are likely to recommend tax deduction of up to Rs 50,000 or Rs 75,000 for mortgage interest on housing loans as against the present eligibility of up to Rs 1,50,000 per year, official sources said.
The task force had originally suggested doing away with this exemption on housing loans in one go or in three years by reducing the exemption limit by Rs 50,000 every year.
Finance minister Jaswant Singh has already indicated that he would strive for a balanced approach while moving towards softer interest regime by providing differential rate of interest for pensioners and the retired employees and hence tax exemptions provided to senior citizens are likely to be continued.
For salaried class the tax exemptions on savings is likely to be phased out keeping in mind that the exemption limit for personal income tax was suggested to be raised from the present level of Rs 50,000 to Rs 1 lakh per annum, the sources said.
Apparently, there is a strong resentment against imposing agriculture tax and hence Kelkar would confine himself to the original proposal to make a beginning by taxing agriculture income of only non-agriculturists.