And for a Friday as the IT return filing date is postponed to December, some thoughts.…. some musings…..
Income tax returns are normally to be filed by July end and due to Covid, postponed to September. Now the new ITR forms and a supposedly user friendly comprehensive on line filing system, arduously developed by IT in collaboration with Infosys, still needs some finishing touches. So thankfully the last date moved to December. Since the last year budget, a new scheme of reduced tax rate is applicable if no rebates under any of the tax savings schemes are availed. It’s a good option for youngsters beginning their careers and makes life much simpler for those earning upto 1 lakh a month – pay tax @ 20% and be done with. No hassles of finding lumpsums to invest into tax savers. Monthly surplus can be invested in Pure Equity Mutual funds under the SIP schemes (Systemic Investments Plan) will lead to long term wealth creation. For older people, in higher income brackets, who have already made investments in PPF, PF, housing loan subsidy etc., best to continue with the old taxation rates. Do not discontinue any of your savings schemes. Senior citizens and super seniors must close down all bank accounts and consolidate into just one Bank. FD rates are falling fast. Best to invest in fully secure RBI 7.15% floating rate Bonds. RBI bonds returns will be higher by 50 basis points over NSC schemes. So safe and better. Later stages in life, no need to file Returns at all.
India’s tax payers base is still very small. Just about 1% of the population pay income tax. The super rich politicians who also double up as farmers do not pay any Income tax. There are only 3 Indians who have income over 500 crores and only 8600 with income over 5 crores. 4% of tax payers, mostly salaried, pay more than 60% of taxes collected. One of the biggest advantages of the failed demonetisation scheme combined with the nationwide roll out of GST is that increasingly life is becoming difficult for tax evaders. However, to plug the loopholes it is absolutely essential that Agricultural income must be taxed. Income is income. What’s so sacrosanct of Agri income to be out of taxation. All the justification of farmers being “Annadattas” are obsolete and redundant. Poor and marginal farmers like the poor in every other sector will anyway earn less than the taxation limits and the Rich farmers must contribute to national exchequer.
With the increased vaccinations and the plausible herd immunities, let’s hope and pray we do not see any more wave of the Pandemic. Let’s all pray for the Economy to be back on track, the job enhancing way, the resilient way, the SEEGOS way.