What would be good to see is the rationalization of income tax rates. Why can't we move away from the regime of tax-slabs, tax-exemptions and tax-rebates, and instead move to a simplified taxation system with the following basic rules -
1. Flat rate of 10% income tax 2. Persons with annual income less than Rs.2,00,000 to be exempt from income tax 3. Persons with annual income greater than Rs.10,00,000 to be levied 10% surcharge on income tax
This simplified regime would have several significant benefits -
1. Much less paper-work... no proof-submission for investments, bills/receipts etc. 2. Much less calculations involved... therefore, almost no room for errors. And most importantly, much less effort 3. But what can be expected to be the most significant benefit is that, this simplified structure would encourage many more income earners to file tax returns
I would urge the Finance Minister to earnestly work in this direction.
