Abolish Income Tax, Usher in a New India

There has been a clamour for a long time demanding the scrapping of the dictatorial tax regimen which empowers babudom and is admittedly not people-friendly. A notice or summons issued by any official in the hierarchy of the tax department brings about palpitations in heart of the recipient. Not every citizen is a tax payee although all are assesses in the eyes of Law. The cause for relatively fewer number of tax filings and consequently lesser proportion of tax payers in co.parison to the general population in the country is to a great extent due to lack of education on matters of Law and taxation.

In it’s current form,it is the most complex of all enacted bodies of Law. So much so that not many practitioners of Law are aware about the basic structure of taxation:most are dependant on few specialists and a great many number of unlicensed tax experts. Net result, confusion is compounded. The frequent and almost annual feature of amending the tax regime with the passing of Union Budget does not help resolve the mayhem created by poor knowledge and increased rates of taxation. Making matters even worse is the spectre of rampant corruption in the corridors of power and tax administration.

Hence,many gave a sigh of relief when the Union Finance Minister recently announced that a new tax law will be brought before the Parliament within a span of six months.

But,this is not the solution to a seemingly perennial problem of where people live with the grim thought etched in their mind that only death and taxes are certain in lifetime. Tax rates and difficulties encountered in enforcement of tax laws make it an uphill task for those enjoined with task of ‘good governance’.

Several studies,seminars,papers,think-tanks and practical situations after, one cannot but arrive at the following popular conclusion-
‘Scrap tax laws’.

Real reforms have been long overdue.
What then is the way for any elected government to raise funds for public expenditure,be it to construct bridges,expressways,hospitals or any other project having the complexion of ‘national interest’ ?

The answer is not far to seek. It lies in the very problem of existing laws being cumbersome,uncertain and unscientific.
So,we abolish the current regime of income tax being levied under different heads of income,across all segments of the society.
Usher in the following changes in governance pattern without much ado:
1. All agricultural income over rupees three crores must be taxable.
2. A transactional tax must be imposed as per the three slabs mentioned below –
a ) Expenditure upto rupees fifty lakhs be automatically taxed @ one rupee only per each transaction.
b ) Expenditure between rupees fifty lakhs and rupees three crores be automatically taxed @ one percent only for every transaction made.
c ) Expenditure above rupees three crores be taxed @ three percent only for each such transaction.

Spread the good word around. Let every citizen take pride in participating in nation-builing activity. None need be defiled as a being a ‘ tax chor ‘. The burden on part of employees of the tax department across all levels would be decreased,if not totally disappear.
In an era of digital age, it is both immoral as well as illegal to continue with the pernicious practice of issuing post-dated cheques. It is incorrect to issue a cheque when funds are unavailable as at time of issuance of the cheque. Thus, abolish the evil habit : make it unlawful to issue cheques for any transaction over and above say rupees five lakhs. This is because a vast majority of population still do not have access to smartphones or the telephony network is unavailable in some regions of the country. They may use cash or cheques to transfer money payable on account of goods and services. Every other transaction ought to be by way of RTGS,NEFT – the swiftest and sureshot way of effecting such transfers of money.

If the above newer system of levying taxes were imposed, the monster called ‘black money’ or ‘parallel economy’ can be defeated. More and more money will surface in hands of the Government. Morever, this would enable a better and proper implementation of infrastructure projects. The national income and per capita income figures would be more encouraging as well as give a true and fair view. 

The menace of epidemic proportions called counterfeit-currency would vanish thus making the rupee stronger in value.
Added to all these necessary changes will be an urgent thrust to be given to use of the ‘digital rupee’ released by the Reserve Bank of India.This must be undertaken on a war footing before foreign powers capture this key segment of the economy.
There cannot be any two words about the dangers of ushering in cosmetic changes and not wholly discarding the present body of taxation law in India. Multiplicity of litigation,fomenting litigation and nurturing acts of corruption through bad provisions that fuel mushrooming of litigation must be halted. The ultimate goal of every endeavor of an elected Government is to enhance the quality of life of the citizens and simplify rules used as crutches for maintaining law and order.

Anything short of these suggested measures would be a blemish in the much touted ‘good governance wagon’.