Robbing Leter To Pay Paul

ROBBING PETER TO PAY PAUL

The big myth on Income Tax Payers in India.

FM said during her budget speech that we are largely as a Nation - a tax 'non- compliant' society and presented that only 3.7 crores are filing ITRs in this poor country of 125 crore population .

A reply to HM from the group of
CHARTERED BODIES OF INDIA is an interesting read:

Hon'bl Madam FM,

We have 82 crore voters out of which,
- 75% are agriculturists ie. 61.5 crores ( You exempted them straightaway, but they can also buy cars , bungalows etc. as you quoted.. Your political colleagues are also enjoying this exemption)

Balance remains... 20.5 crores
Less:24% BPL class ( Below poverty line)

Means 15 crore population (which is non agriculturist and non BPL) ..

Less : Senior Citizens, Non working wives, unemployed youths, below-taxable income earners... political class.. (say 75%) ... in a typical indian family only 1 earning member and 5/6 are dependent on him....
Balance: (15-11.25%) = 3.75 crores is the earning class ... which file ITRs and ... they are already filing it...
....
So almost no gap.

If FM desires more people to be drawn into income-tax net, then instead resorting to frequent sudden raids, infructous surveys, sending demand notices, avoidable scrutinies, demonetisations (viewed as tax terrorism) ......please consider

1. Introduce simple Income Tax on Agricultural Income on large landlords ( Say 10 Acres plus ) - you can add 26% of Agriculturists as tax payers ( Politicians are also enjoying this exemption )

2. Instead of introducing Rs. 5000 /10000 penalties on late filers of IT return ...
come out with positive approach and introduce incentives to IT return filers (as in Pakistan- IT assessee gets discount in purchase of Car )

3. Introduce Privilege card to those paying taxes above certain limit.. privilege card to entitle assessee with benefits like Priority quota in railway tickets , Use of airport lounges, subsidised medical facilities, etc. let the Tax payers feel proud.

4. Introduce medical/LIFE insurance, on YHE basis of average ITR filled... like coverage upto twice of Gross Income in ITR filed for mediclaim and ten times risk cover in case of life insurance

5. Introduce Pension after 65 yrs of age on the basis of tax paid by tax payer during his/her working life.

Let honest taxpayers get certain direct benefits....

As on today, 3.3% of Indian population is filing ITRs as compared to 8% of China.

Adding large agriculturists to Income Tax Net, may shoot the figure to more than 10% .

THESE incentives suggested might help eliminate "tax-terrorism mindset" and a tax compliant nation .