Recommendations for Union Budget

ALL BUDGETARY-GIMMICKS announced in usual pre-poll budgets should prepare people for rise in prices and heavy dose of increased taxes in the first post-poll budget of the forthcoming year, when the new Finance Minister will justify added taxes because of empty treasury and development in national interest. Union government should go ahead with idea of including tax-rates not only for direct taxes but even for indirect taxes in the relevant Acts so that not the tax-rates but slabs/categories may be allowed to be changed. Additives in form of cess and surcharge complicate tax-structure and should be merged with basic tax-structure. Single-point tax-system, only in form of excise-duty at the manufacturing level abolishing value added tax (VAT) etc, can drastically cut tax-collection cost and tax-evasion, which can be managed by devising a modified tax-distribution formula amongst centre and states (manufacturing and consuming). Accumulation of wealth in selected hands should be prevented because of parallel black-money mostly used for investment in property and gold. Even a slight touch of socialistic approach to ‘free’ economy by eliminating parallel flow of black money can perhaps induce a nominal-tax regime of just one income-tax slab for collecting much more revenue than present three-slab structure. This would make middle-class traders enjoy a tension-free life with no need of search, seizure and survey necessitated at all. TDS system also needs to be simplified with just three categories of tax-deduction at rates of 2, 10 and 30 per cent with TDS returns filed annually to prevent tax-deductors visiting tax-consultants too frequently.