No Income Tax in India : Modiʼs Next Move
By Raviraj Parekh
Imagine how good it is if Income Tax is abolished in India? No tax means – more money to every individual. You must be thinking is it a joke or what? Well, it is not a joke. After demonetization of old high denomination notes, the government is expected to roll out next economic reforms and No Income tax could be one of them. Letʼs discuss how this dream can be turned into reality. In order to make India “Sone Ki Chidiya” again Shri Narendra Modi has started a fight against black money and corruption. Recalling high denomination currency of Rs.1000 and Rs.500 was the first step towards that. This step was in accordance with reviving Indian Economy – Arthakranti Proposal. The ArthaKranti proposal is a well-researched scientific approach designed to completely transform the current Indian socio-economic scenario.
This has been given by a Pune based “Arthakranti Sansthan” which is an Economic Advisory body constituted by a group of Chartered Accountants and Engineers. This funda has been patented by the Sansthan. The government is planning to execute this proposal in two parts.
Part A : Recall and scrap old high denomination notes Rs.500 and Rs.1000. Introduction of new Rs.500 and Rs.2000 Notes Old Rs.500 and Rs.1000 notes to be deposited into account. In 50 days bring around 15 Lac Cr in banks.
Part B : Reduce Interest rate on saving bank account from 4% to 2% or less. Reduce fixed deposit rates drastically. Reduce home loan rate and keep it up to 7-8%. Implement GST by 1st September, 2017. Abolish Income Tax for individuals. Reduce corporate tax rates. Introduce new Banking Transaction Tax.
It is claimed that if economic reforms mentioned in Part A and Part B are successfully implemented , India will be like USA. The government has already started implementing part A. It is expected that by 30th December, 2016 around 15 Lakh Cr old high denomination notes will be deposited into various banks. From the year 2017 implementation of Part B will commence.
In the new year 2017 banks will have enough cash on hand hence saving bank interest rate will be reduced from 4% to 2%. In addition , fixed deposit, rates will be reduced to 5% -7%. Home loan and car loan interest rate will be reduced to 7% to 8%.which will facilitate real estate sector and affordable housing scheme project. The price of real estate will reduce and will be affordable to common man. By September 2017 the government will introduce GST reforms where all tax will be replaced by single tax system , GST. In addition to GST, it is expected that corporate tax rate will be reduced to 30%.Once all these steps will be executed Income of every individual in India will be income tax-free then onwards. No Income Tax will be the biggest gift ever by any prime minister in the history of India.
Now a question arises that once the income tax is removed how the government will get money to run the nation. Well, once all cash will be deposited into banks ,everyone will be forced to use banking system for every transaction. New banking transaction tax will be introduced. Every transaction such as cheque, Demand draft, RTGS, NEFT, Credit Card, Debit card etc will come under this new tax system. The rate of the new banking transaction tax will be 0.10% to 7%. Everyone including farmer will be covered under new banking transaction tax system. The government will directly get the income based on transactions. No black transaction will be entertained. The strict rule will be formulated for unaccounted money and non banking transaction.
Benefits of Implementation
Transparency in Economy ,More purchase power to individual, Saving in amount of tax paid ,Drop in commodity prices ,Availability of Loans from bank at lower rates,Terrorist and anti-national activities will be eliminated,Significant growth in the employment,Indian economy and business will be globally competitive . If it is implemented effectively India will surely become a global economy with a competitive edge.
As of now, no confirmation is received on the removal of income tax and implementation of banking transaction tax. However, it is indicative that Modi government will take steps suggested above after demonetization move.
Do you think demonetization of the old high denomination is correct step by Modi Government? Arthakranti – What is it?
Do you think ArthKranti proposal will be beneficial to our country? I support the initiative of Modi government. If you support this initiative do share this post with others on facebook and twitter.
Hope about dreaming zero tax India will become reality soon.