The Modi government could be thinking about abolishing the Income Tax completely and replacing them with flat tax on banking transaction only.
Zee Media Bureau
New Delhi: As millions across the country stand in queue outside banks and ATMs to exchange old notes or withdraw cash following the demonetisation of Rs 500 and Rs 1000 notes, questions have been raised as to 'what next from the Modi government?'.
On November 8, in a surprise move and sudden crackdown on black money, Prime Minister Narendra Modi announced the demonetisation of the Rs 500 and Rs 1000 notes thus making them no longer a legal tender.
The move garnered both positive and negative feedback from various corridors. However, one question that has been lingering in the minds of the common man is 'what next'?
According to a report on CNN-NEWS 18, the Modi government could be thinking about abolishing the Income Tax completely and replacing them with a flat tax on banking transaction only.
As per the report, Arthakranti Prathisthan, a Pune-based Trust, has a set of proposals aimed at India’s ‘economic rejuvenation’, demonetisation being one.
Anil Bokil, who was largely in the news following the demonetisation of the currency notes, is the founder of the Trust and CNN-NEWS 18 reports that a trustee confirmed to it that the founder had met PM Modi for over 90 minutes a year ago where demonetisation was discussed.
Of the 5 proposals, the BJP-led government has already implemented the demonetisation of currency and what is most interesting now is the the top proposal, NEWS 18 states, and i.e. abolishing the Income Tax completely and replacing it with flat tax on banking transaction.
According to the proponents, the Banking Transaction Tax (BTT) would replace all direct and indirect taxes and would yield revenue greater than the current tax take, NEWS 18 states adding that it would also be less prone to corruption.
CNN-NEWS 18 also quoted Yamaji Malkar, Arthakranti trustee, as saying “A banking transaction tax would yield the nation about Rs 40 lakh crore, which is more than what the nation nets right now through the current system.”
Will the Modi government go ahead with the abolition of income tax is another question that remains to be answered.
However, what is interesting is that even party leaders like Subramanian Swamy had argued about scrapping the income tax and how it would boost the economy.
Swamy had argued that abolition of Income Tax will increase savings rate and help economic growth.
So, where does the Modi government stand on the abolition of income tax? Only time will tell!