-- D K Suvarna, Mumbai

Yes, you are right. I had missed this amendment. After receiving your communique, I studied the entire aspect and the following is the result. I wish to thank R B Ahuja, Senior Assistant Commissioner, for his guidance.

The following categories are exempt from paying professional tax:
i) Senior citizens

ii) Members of armed forces, reserve and auxiliary services, defence ordnance factories, etc

iii) Badli workers in textile industries

iv) Persons suffering from permanent physical disability, including blindness (note: mentally retarded persons are not covered)

v) Parents or guardians of any person suffering from mental retardation or a physically disabled person

vi) Women exclusivelyengaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana of Directorate of Small Savings (this covers only the post office five-year recurring deposit account and not PPF, NSC, time deposit, monthly income scheme etc).

Now, I have two objections:

1) Persons suffering from permanent physical disability, including blindness are exempt. What about mentally retarded persons?

2) If you want a good laugh, study the said amendment carefully. In respect of senior citizens, the amendment granting exemption actually stipulates: ``The persons who have completed the age of 65 years, provided that such mental retardation shall be duly certified by a registered medical practitioner....'' This implies that anyone who celebrates his 65th birthday becomes mentally retarded. It is an obvious printing error, but nonetheless, so far the draftsmen seem to be unaware.

The rates at which the tax is payable are as follows:
Salary per month Professional Tax

(Rs)(Rs)

Less than 2,000 nil

2,001 to 2,500 30

2,501 to 3,500 60

3,501 to 5,000 90

5,001 to 10,000 120

10,001 and above 150

I'm a senior citizen with telephone connection and the house area is less than 600 sq ft. My income from UTI/MFs and bank interest including withdrawal from NSS-87 after availing benefit of Rs 15,000 u/s. 80L is less than the taxable limit for the financial year 1998-99. Please let me know whether I will have to file returns. For the annual year 1998-99, I filed returns as my income was exceeding the taxable limit of Rs 40,000, though tax payable was nil. In other words, the income was less than Rs 1 lakh as in case of senior citizen. So far, I have not heard from the IT department. What is their procedure? How long do I have to wait for the assessment order?

-- T Nagraj, Mumbai

Out of the criteria mentioned in the proviso to Sec.139(1), only the possession of a telephone is applicable to you. However, according tonotification no. 10674 dated 20.8.98, the criterion of having a telephone does not apply to an individual who has attained the age of 65 years and is not engaged in any business or profession during the previous year.

Consequently tax returns need not be filed by you. It is well known by now that the department likes to take its own sweet time. As long as you have an acknowledged copy of your IT return, filed in time, you needn't worry. I have a suggestion. Though you are not required to file returns, it is good to do so. Otherwise, you will be filing returns for one year and not the other year. You will lose continuity. Moreover, the authorities are so much enchanted by this scheme, that they started with 2-by-4, expanded it to 1-by-6 and may expand it further in future.

I'm an NRI and need some information if you can help: I have some foreign exchange saving. Should I transfer it to India or keep it abroad. And what in each case is the best way to keep it safe? Are there any possibilities toget some secured returns on these savings as well? Is gold a good hedge to keep them protected?

-- Ajay K Gupta, Ajay.Gupta@whosom.unon.org

If you invest abroad, you will certainly lose on interest and this is a heavy loss. If you invest in India, you may lose if the rupee depreciates at a faster rate than the differential between the interest rates. The first one is a certainty and the other one is a possibility. You be the judge.

I have not understood your query about using gold as a protection. Protection against what? Gold is an unproductive asset and has ceased to render protection against inflation, both abroad as here in India. The price of this yellow metal is expected to keep pace with inflation, point by point and protect the purchaser against the value erosion of currency. The rise in bullion prices had been indeed noteworthy after the spurt in oil prices and worldwide inflation. The returns have, however, become negative ever since it was delinked from international currencyin 1971 and adoption of floating exchange rate in 1973. Gold is like bearer bonds. The taker is the owner.