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Media-reports indicate that surcharge on IT may hit investments

Kashmir Times. Dated: 7/19/2019 10:22:32 AM

Dear Editor,
It refers to media-reports indicating that estimated rupees 12000 crores proposed to be earned by imposing surcharge on tax-payers in higher slabs may adversely affect investment in India. India tuned up with most other countries in the world when Raja Challiah committee report was implemented by bringing highest Income-Tax slab down to 30-percent. Tax-system should be simple-most abolishing concepts of cess, surcharge and subsidies to the extent possible.
In present system with persons having assessed income upto rupees five lakhs per annum totally exempted from Income Tax, a person having income say rupees 501000 will evidently try to evade rupees 1000 from income because otherwise he would be getting exemption only on income upto rupees 250000. Basic exemption-limit should be same for all even if it could be less than rupees 500000.
Likewise cess-imposition on higher income-slabs will also lead to tax-evasion on marginal changes in income-slab. Even if persons in higher income-slabs could be desired to pay extra, additional tax-slabs could be there rather than imposing-cess. Ideal is to keep maximum tax-slab at 30-percent. Ultra-rich persons could be desired to invest compulsorily a part of their income in long-term government-bonds with some nominal interest. Such a system would make huge funds available for infrastructural development which would have even generated more employment in public-sector. Concept of expenditure-tax should be initiated at least for persons in higher-income group whereby even marriage-tax could also be imposed on high-profile marriages exceeding some stipulated budget.
Most tax-exemptions available under various sub-sections of section 80 of Income Tax Act should be clubbed in one category with clubbed exemption of say rupees 2.5 lakhs with additional exemption of rupees 50000 for senior citizens. Misused tax-exemptions under section 80G, 80GGB, 80GGC for charity and contributions made to political parties apart from exemption to political parties under section 13A on contributions received should be altogether abolished.
—Madhu Agrawal,
1775 Kucha Lattushah
Dariba, Chandni Chowk Delhi.