Much was expected of the first full Union budget of BJP-led Central Government to be a ‘budget with a difference’ for being realistic, simple with a systematic and realistic tax-regime in a manner to abolish additives like cess, surcharges etc. It was also hoped that abolition of such additives could be more than compensated by minimising undesired subsidies. But even most talked about abolition of subsidy on LPG cooking gas for affording ones was continued. Likewise not-much-used postal items like Post-Cards, Inland-Letter-Cards etc with extra-ordinary heavy subsidy were neither discontinued nor could subsidy be reduced on these. Dual rate of excise-duty according to length rather than ex-factory price still continues. Duty-structure for excise and custom should have been in simple slabs like of 10, 20, 30, 50, 70, 100 percent etc including of all additives. Whenever duty on certain commodity was required to be changed, it could be placed in some other slab out of so decided fixed slabs.
Likewise misused Income Tax exemptions like on charity, donation, political parties still continues without realising that extra revenue so earned could be used for public welfare and national development which is not less important than charity or donation. The Union government should make a detailed study on exemptions allowable under Income Tax Act, and retain the bare minimum like for savings, interest on home-loans, insurance-policies including medi-claim, and other such aspects which are instrumental for benefit of tax-payers themselves.
Union government should incorporate a permanent provision of ‘Income from undeclared sources’ in Income Tax returns with tax-rate of highest 30 per cent slab on such head, as a practical step to effectively check menace of parallel economy of black money.
With India now having a highest tax-slab of 30 per cent on income, most people may find it advantageous to declare unaccounted earnings in their Income-Tax returns. System will auto-detect role of black money in property-deals when buyer purchasing property from black money will be caught in case seller takes advantage of such a provision of ‘Income from undeclared sources’ in Income Tax returns. There was a time when India had a highest tax-rate slab of 98 per cent with people paying upto 50 per cent for ‘whitening’ their black money.
