Tuesday, July 28, 2009

Income tax system of India

As usual, July 31st is the last date of filing the Income tax returns. Most of the working class people including me, are busy again to finish this yearly duty. Every time I do this exercise and I feel frustrated. Why do all these junk works like get proof of your investments, get different types of receipts etc. Every year we have to do this because it will save us crucial money in the form of tax exemption. The whole tax system is quite complex. On my own I have never been able to find out my tax liability(Although I am in good Mathematics, as I have done masters in Mechanical Engineering). Because there is this clause and there is that clause. Last year I paid some 500 rupees to some guy to file my income tax returns. This year I got someone who charged only 150.
The point I am trying to make is when things are complex then things become corrupt. I f we make things simple then there will very less possibility of corruption. It will save a huge amount of time, money and energy of all the people. First the government imposes a tax then they give some exemption. These exemptions are the root of all corruption. For salaried people there is not much scope in the sense that they can not abuse these exemptions for great benefits. But for business people there is unlimited scope. One can learn from Ramalinga Raju how things can be manipulated even in a big public company.
The income tax for salaried people can be simplified very easily. There should be no clause for any exemption. There should be some flat tax rates for different level of income like we have billing of electricity. This will not only make life easy of a tax payer but also of the employer and of the government also.
Even when we have an economist Prime Minister and honest too, we can not expect this happening in near future. After all this a congress government, who are the creators of all these corrupt systems and socialistic mentality.

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