Widening of taxpayer base is possible in India?
Often we find during budget speech and other data analysis that only 3.7 crores* are filing ITRs in this poor country of 125 crore population as against 82 crore voters.
However, out of above 82 Crores voters or citizens,
– 75% are agriculturists* ie. 61.5 crores ( You exempted them straightaway, but they can also buy cars , bungalows etc. as often quoted.
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 can file ITRs and … they are already filing it…
Almost no gap. Whetherstudy is stressing unnecessarily on numbers without knowing the country?
What can be done ?
If country wants more people to come into tax net … then… instead foolishly resorting to rampant raids, surveys, notices, scrutiny, demonetisations etc etc viewed as *tax terrorism … Govt. Can do following :
1. Introduce simple Income Tax on Agricultural Income on large landlords ( Say 10 Acres plus ). We can add 26% of Agriculturists as tax payers *( Politicians are also enjoying this exemption )
2. Instead of introducing 5000 /10000 penalties on late filers of IT return …
come out with positive approach and introduce incentives to IT return filers ( learn from 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 etc… let Tax payers feel proud
4. Introduce medical insurance / life insurance on 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 working life..
Let honest taxpayers get certain direct benefits….
As on today, 3.30% of Indian population is filing ITRs as compared to 8% of China…adding large agriculturists to Income Tax may shoot the figure to more than 10% …. it may help to cool down existing tax terrorism mindset and building a tax compliant nation.
Undoubtedly we are concentrating on the deepening the hole of the existing taxpayer but we also need to concentrate on widening through innovative means like bringing agri income in to taxation.
Views ans suggestion on above is surely going to help in new policy.
We request you to give your valuable suggestions and feedback. We will compile it for presenting at appropriate place in the ministry.