India is doing great on national and international front but as citizens of India what is our greatest desire?? Do you also dream of a tax free India? Is it possible? Have you ever thought how relaxing will be days when income in your hands will no more be taxable, when at the end of financial year i.e. on 31st March every year you will be just calculating the total income earned and not the taxes which you need to deposit before midnight.
Will income tax free nation means no tax at all? Yes, it will mean zero tax literally..it will not list out the exemption limits,instead, tax will be free on complete income you would be getting thereafter. No more income tax free will mean you an elaborated calculation showing list of deductions and exemptions as a conclusion of which you can save tax, rather the concept of deductions and exemptions will no more exist. There will no more be slab rates, no more hoping from budget to increase the basic exemption limit, to decrease the age criteria and moreover it will be an equitable right.
But will it mean no tax at all India, well, precisely not!! The tax burden will shift from presently being charged on income to baking transactions at comparatively reduced rates. This will lead to introduction of new tax regime namely, banking transaction tax for us. Where income will not be taxable in the hands of taxpayers but the tax will be levied on every banking transaction we make. The tax is expected to range from 0.10% to 7%. We can trace the intention of government towards the notion from the continuous fiscal steps it is taking, the opening of crores of banking accounts and deposit of all money in bank to route future transactions through the banking channel after demonetization,linking all banking accounts with aadhaar can also be considered as part of the proposed move.
There are both positive and negative presumptions being made on this tentative move of the government. The one’s in support say abolition of income tax will lead to:
- No evasion of taxes
- An end to creation of black money
- Tax saving
- Saving in administration costs of government
- Increased purchasing power in hands of citizens
- Boost in real estate and investment sector
- Greater industrialization
- Increasing employment opportunities
- Reduction in interest rates
- Housing will be even more affordable and in reach of common man
- Transparent economy
- Easier compliance
- A watch over terrorist funding and anti national activities
The others who are in doubt about the successful implementation of prospective policy reason it through reduction or abolishment of this direct tax which is progressive in nature will shift the burden over regressive indirect taxes increasing hardships of poorer and will not be a fit for developing economy like India. They also suggest a alternative route which aims at taxing super rich at higher rates and giving the benefit to the middle class making the majority of taxpayers in India through reduction in taxes.
Nothing is impossible for India, especially after demonetization and GST. It might be high time to gear up ourselves to see one more radical change in the economic history of India.
Tax Haven countries:
India would surely not be the first one to carry out such a measure. Here are a list of countries having no Income Tax at all:
United Arab Emirates