Income Tax Deduction-The sure shot way to ensure Indian LPG Consumers give up LPG subsidy

The inspiration for today’s blog post is Prime Minister’s Narendra Modiji’s remarks at the inaugural session of RBI Conference on Financial Inclusion

Quote

“I believe that our banks should take all their employees in confidence. Every bank should resolve that their employees would give up the subsidy. All industrial houses should decide that their employees would give up subsidy,” Mr. Modi said.

The Prime Minister said that the government’s intention behind the campaign is not to add to its coffers by saving on subsidy bill, but to provide LPG cylinders, a clean energy, to poor households who use firewood for cooking.

“Give up voluntarily. If one crore people give up this gas cylinder subsidy... one crore poor families who burn firewood, which leads to deforestation, carbon emission (and) their children, grow up in smoke... The cylinder (subsidy) you give up should reach to the house of that poor,” he said.

Unquote

          As a responsible citizen, I am willing to give up LPG subsidy if I am assured that a deprived family will benefit.  The question is how that assurance can be visible and also be economically tracked.

          One option is to ensure tax deductions as equivalent to the LPG Subsidy foregone.

          The deduction model as for the Professional Taxes can be adopted here.   

Section 16(iii) : As per section 16(iii) of Income tax act ,Professional tax on employment or tax on employment levied by state under article 276(2) of the Constitution is allowed as a deduction from the Salary income.

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