Tuesday, June 14, 2011

Hon'ble Minister for Finance answers NC querry

In the Question Time of the National Council, the Hon’ble Member from Lhuntse asked question on tax exemption on educational expenses. He said that while tax for Nu.50000 a child was exempted, due to increase in the prices of commodities, the expenses exceeded beyond 100,000. He also said that tax exemption applied only if the expenditure was incurred on the educational expenses of one’s own children and not dependents. Therefore, he asked if the Government could increase the limit to Nu. 1,00,000 a child annually and expenses incurred for the education of their relatives.

To this, the Hon’ble Minister for Finance said that while the Ministry undertook a research on the issue, the finding was not satisfactory. The finding indicated that the increase in limit from Nu. 50000 a child a year would not benefit the general public while those at higher income level could be promoted. He also said that tax for Nu. 5000 a child was exempted without having to provide evidences of expenditure. Should the limit be increased from Nu.50000, the Hon’ble Minister said that the same should be done with Nu. 5000 and the economy would be at stake. It could lead to corrupt practices as well. He said that tax exemption for educational expenses of one’s relative cannot be arranged because if provided, everybody from the villages would prefer studying in schools in the towns.

The Hon’ble Minister said the matter would be taken into account in future.