City Pensioners Assn. seeks reduction in Income Tax slab on dividend payout
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City Pensioners Assn. seeks reduction in Income Tax slab on dividend payout

November 21, 2020

Writes to PM & Finance Minister 

Mysore/Mysuru: The Mysore City Pensioners Association, Siddarthanagar, has urged the Union Government to reduce Income Tax slab on dividends and interest on fixed deposits for senior retirees and pensioners.

In a letter addressed to Prime Minister Narendra Modi, the copies of which have been sent to Union Home Minister Amit Shah, Union Finance Minister Nirmala Sitharaman and other top officials of the Union Finance Ministry, Association President K.C. Biddappa and Secretary Prof. K.C. Belliappa said that while presenting the 2018 budget, the Union Government exempted Rs. 50,000 of interest accrued on fixed deposits from Income Tax and tax on dividend, that was only above the                                                                      Rs. 10 lakh threshold level. 

However, to the shock and dismay of millions of pensioners, the Government in last year’s budget, announced that the entire dividend will be treated as taxable income, thus giving a massive relief to the Corporate Sector.

Pointing out that senior citizens and pensioners have invested their hard earned retiremental savings in equity shares and fixed deposits to eke out a respectable living, Biddappa said that with the imposition of normal taxation on the entire dividend, they have been severely affected and unable to meet their financial commitments, especially the rising medical expenses.

Maintaining that with the cost of living rising steadily, the pensioners are finding it difficult to manage their lives, with declining income due to decrease in interest rates and full tax on the dividend, he said that being honest tax payers, they have a legitimate right to live with dignity and little comfort in tune with the philosophy of the Government. 

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The Association has requested the PM to reduce the Income Tax rates on dividend earned by only the unemployed senior citizens to a maximum slab of 10 percent, irrespective of the quantum of the dividend amount and interest accrued, as was done to the Corporate Sector. This concession to senior retirees is in vogue in many developed countries across the world, Biddappa noted.

Stating that there are 55 to 60 million pensioners and retirees throughout the country, Biddappa appealed the PM and the Finance Minister to take immediate action in this regard in the forthcoming 2021 budget and thus bring back the smile on the faces of pensioners.

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