13/07/2024
In light of the current economic situation in India and the need to support citizens in leading respectable lives while fulfilling national duties, the Ministry of Finance should consider the following income tax reforms to alleviate financial stress, encourage compliance, and promote nation-building:
Pension Exemption: All types of pensions should be tax-free, serving as the sole source of social security for senior citizens.
Tax Rates: Rationalize income tax slabs as follows:
No Tax: Income up to ₹750,000
2%: ₹750,001 to ₹1,000,000
3%: ₹1,000,001 to ₹1,250,000
5%: ₹1,250,001 to ₹1,500,000
8%: ₹1,500,001 to ₹2,000,000
12%: ₹2,000,001 to ₹2,500,000
18%: ₹2,500,001 to ₹3,500,000
27%: ₹3,500,001 to ₹5,000,000
30%: Above ₹5,000,000
Tax Deductions: Allow exemptions for:
Pension Funds: Premiums up to ₹200,000
Life Insurance: Premiums up to ₹200,000
Health Insurance: Premiums up to ₹100,000
Education: Up to ₹1,000,000 or 1% of total income
Home Maintenance/Rent: Up to ₹1,000,000 or 5% of total income
Health Management: Up to ₹100,000
Disability/Senior Citizens: Higher tax slabs
Surcharge:
Business Income: 2% surcharge
Multiple Income Sources: 5% surcharge
Income Tax Exemptions: Up to ₹1,000,000 for agriculture, medical, education, legal professions, and politicians.
Mandatory PAN and ITR Filing: Every citizen should file an ITR annually, even if below the taxable threshold.
These reforms will create a more equitable and efficient tax system, ensuring eligible citizens receive appropriate support based on their economic conditions.
