A CASE FOR ZERO PERSONAL INCOME TAX

For past two years , I have been advocating total abolition of Personal Income Tax

Not because , a few countries such as Saudi Arabia , UAE , Qatar , Oman , Kuwait , Bahrain etc , have NIL personal income tax

But , even for a less developed country like ours , it makes a lot of sense

Here is why :

* Today's Hindustan Times reports following study by Price Water-house Coopers ( PWC ) :

" Average take-home salary as a % age of total salary " - are :

>   Saudi Arabia................ 98.86

>   China.......................    62.05

>   Germany...................   60.61

>   USA..........................   60.45

>   UK...........................    57.28

>   India.........................   54.90

>   Italy.........................    50.59


*   It is obvious that Saudi Arabian citizens take home more because there is NO personal Income Tax there

*   In India , our " Take home Salary " is only 54.90 % , because we pay a very
     high personal income tax

*   Of the total revenue receipt of Central Government ( 2013-14 est ) ,Personal      Income Tax contributes only 23 % ( approx Rs 2.4 lakh crore )

*   If personal income tax were to be abolished , this revenue will be lost

But , here is the Upside :

*   India's current Household Saving Rate = 21.9 % of GDP

*   That means our total Household Savings = Rs 24.72 lakh crore ( 2012-13 )

*   Of these , 

     >  Rs 16 lakh crore are tied up in unproductive Physical Assets (Gold/Land)

     >  Rs   8 lakh crore are invested in Financial Assets (Bank / Mutual Funds)

*   If Personal Income tax is abolished , it is possible that our Household 
     Savings Rate may go up from 30.1 % to 45% of GDP (it was 40% in past)

*   That would add Rs 12.36 lakh crores , raising total to Rs 37 lakh crore !

*   And most likely , the proportion of investments would be ,

    >   Rs 7    lakh crore in Physical Assets , and

    >   Rs 30  lakh crore in Financial Assets ( Productive use )

And that's not all  !

*  With NIL personal tax to pay , all the cash ( black money , no doubt ! ) ,
    lying in bank lockers , will get deposited in official bank accounts , within
    one year

Now , couple this BOLD & IMAGINATIVE step with :

*  Creation of  SPVs , dedicated for building Infrastructure . No questions asked

   for amounts invested in these SPVs . No dividend tax for 10 years 

If implemented , there will be no reason for us to go begging China / Japan / USA for investments in Infrastructure / Manufacturing etc !


*   hemen  parekh  /  12  Nov  2014

--------------------------------------------------------------------

Make    Yourself    Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

(  Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :

    narendramodi1234@gmail.com; 38ashokroad@gmail.com;ajaitley@del5.vsnl.net.in; jayant.sinha19@sansad.nic.in;piyush.goyal@gov.in;nitin.gadkari@nic.in; spprabhu1@rediffmail.com;bandaru@sansad.nic.in;smritizirani@nic.in;nsitharaman@nic.in; ravis@sansad.nic.in;sureshprabhu@irctc.co.in;prakash.j@sansad.nic.in;secy-ipp@nic.in; amitabh.kant@nic.in; shaktikanta.das@nic.in; rsecy@nic.in; adhia1981@gmail.com; ceo-niti@nic.in; atul-chaturvedi@nic.in; uma.bharati@sansad.nic.in; d.pradhan@sansad.nic.in; rprudy.office@gmail.com; rudypr@rediffmail.com; eam@mea.gov.in; mosvks@mea.gov.in; mvnaidu@sansad.nic.in; mnaqvi@sansad.nic.in; rao.inderjit@sansad.nic.in; mljoffice@gov.in; sadananda.gowda@sansad.nic.in; ministerminority@gov.in; najmah@sansad.nic.in; minister-ca@nic.in; ramvilas.paswan@sansad.nic.in; gandhim@sansad.nic.in; akumar-alpha@sansad.nic.in; jpnadda@sansad.nic.in; hm.moca@nic.in; geete@sansad.nic.in; simratbadal@yahoo.com; ns.tomar@nic.in; rmsingh@sansad.nic.in; tc.gehlot@sansad.nic.in; dr.harshvardhan@sansad.nic.in