Sucheta Dalal :Desperately Needed: Senior citizensR17; alert
Sucheta Dalal

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Desperately Needed: Senior citizens’ alert  

Aug 21, 2006

On August 14, Dignity Foundation, one of the few non-profits involved in the Senior Citizens’ cause held a unique protest meeting in Mumbai. The aim was to discuss economic hardships that have been piling up against them, especially under the United Progressive Alliance (UPA) government.


Sheilu Srinivasan, Convener of Dignity Foundation says that the decision to launch a formal protest, formulate an action plan and even consider litigation was triggered by hundreds of letters to Dignity that document the misery caused by a callous administration and insensitive tax regime, which makes no allowances for the difficulties faced by seniors.


The UPA’s policies have been a sore point with all tax payers; so much so that a parliamentary panel recently rapped the government for harassing salaried persons by making the Saral form extremely complicated. Speaking at the public meeting that day, Chartered Accountants (CA) Ameet Patel and Sandeep Shanbagh said that Tax Deduction at Source (TDS) not only transfers the burden of collecting taxes on to people, but this government has made things worse by imposing harsh penalties even for occasional lapses or mistakes in deduction.


Shanbagh cites the example of penalties for failure to deduct TDS on property purchased from Non Resident Indian (NRIs). Given that most property deals are mediated through brokers, how can a buyer be certain whether a seller disposing property in India and accepting a cheque payment is a NRI? The government, they both say, refuses to listen even to such difficulties.


This attitude stems from the assumption that ever tax payer is actually an evader and ought to be paying more tax. Ameet Patel, Partner of Kanu Doshi Associates, says that the burden on accountants has increased so much that India is fast heading for a severe shortage of accountants and that CAs will soon refuse to handle small individual accounts. This is even more reason to simplify the tax process or move to an expenditure tax regime.


If the anger among ordinary tax payers and experts runs so high, then it is considerably higher among senior citizens. Over the last few years, they have learned to live with diminished incomes as interest rates fell sharply until last year. But what rankles more are callous policies such as a unilateral decision to introduce TDS on the Senior Citizens Saving Scheme of 2004, that too with retrospective effect; the change in commission rules by public sector insurers that effectively deny Mediclaim to people aged over 55 and scrapping tax concessions on Public Provident Fund investment.


A point that was repeatedly stressed by tax-paying seniors at the Dignity meeting was that a lifetime of paying high taxes entitled senior citizens to demand some tax concessions as a matter of right. ‘‘We are not beggars’’, thunders A.N. Shanbagh, a renowned tax expert and author of ‘In the Wonderland of Investments’.


In fact, issues relating to senior citizens are not limited to taxes and medical insurance, although they are the most important in terms of priority. As Shanbagh says, the process must start with deciding who is a ‘senior citizen’ and ensuring that the threshold age is applied consistently across all policies pertaining to them. There cannot be a one age for deciding on retirement, another for getting medical insurance, a third to be eligible for tax concessions and a fourth for availing of travel benefits.


Consistent definition is only the beginning. Given that the number of tax paying seniors will increase every year, their issues need special and sympathetic attention, especially in country that collects taxes but provides no social security cover to the elderly.


It could be simple issues like providing a separate window for obtaining a PAN card easily, or help in getting rid of long-held equity investments without difficulty. Last week, I received a call from a senior citizen who had small investments in four blue chip companies. He has held physical certificates for decades and only realised how complicated life had become when he decided to sell the shares recently.


Since his income is not in the taxable bracket, he does not have a PAN card, which is now mandatory for all stock market transaction. From opening a demat account, to figuring out the dematerialisation process, it was going to be a long journey to encashing his investment. If the government chooses to look at such cases sympathetically, it could easily find a way to work with NGOs to allow such seniors to dispose off their investments, without a complicated process for what is essentially a one time transaction.


The need for such extra attention has to extend to other ministries as well. For instance, the government provides fare concessions to seniors across all modes of transport. How about taking it a little further? Here is one example. When Indian Airlines was a monopoly carrier, it routinely provided wheel chairs to seniors free of cost, full service private carriers did it as well. But budget airlines charge a steep Rs 500 for wheel chair facilities.


Clearly, budget airlines are entitled to do everything they can to keep costs down. After all, providing the service involves the cost of attendants and clearances as well. With at least eight airlines operating in the Indian skies, won’t it be more economical for airports to provide wheel chair services and recover the cost from carriers?


The situation is even worse at the railways and in buses, where special facilities are not available even for a price. In almost every aspect of life, senior citizens’ issues have to be examined and addressed in a focussed manner. This has surprisingly not happened even though the Union cabinet is dominated by senior citizens who enjoy myriad privileges at the tax payers’ expense.


-- Sucheta Dalal