The Hindu Business Line : Income tax issues

The problems of revenue collection in India have more to do with how many people pay income tax than how much is evaded. Following are a few possible solutions:

Every citizen must pay income tax no matter how low it is (calculated on minimum wage).

All tax payers must have a PAN number that has to be used as identity card also.

All citizens in possession of the PAN card will have first claim over the government services than those who do not. True, government services are for all, but tax payers should have the first right to them.

Sunil Gupta

Punjab

No flexibility

The Finance Minister claimed that reintroducing the savings plan of old section 80C would provide more flexibility. But sectoral limits will not apply only to respect assessees who are not members of the Provident Fund.

This is because once you are member in a provident fund, you simply can not get out of it till you retire or migrate or die!

Worse still, your provident Fund contribution will continue to be invested to a maximum in a government security or similar securities irrespective of your individual risk profile.

Thus the flexibility to choose higher risk-return portfolio available only to those who do not need it.

As a part of pension and retirement related funds reform, the sectoral limits enforced by acts such as P.F. should be also removed.

N.K. Raveendran

Bangalore

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Income tax issues