Benefits Govt should give to income tax payers

Today income taxpayers do not get any benefit as they are too few in number to have any impact on vote bank politics. About 1.5-2% of Indians pay income tax and they pay more than all corporate pay together as corporate tax. But tax payers get no considerations in day to day life.

If I were the finance minister of India, I would roll out following benefits to income tax payers.  

Benefit 1: Accident expense cover

Any taxpayer who has paid more than say 10000 INR as a tax in any financial year, should he/she face any accident/emergency/life threatening situation, first 48 hours of medical care will be covered by govt- private hospitals included.

Hospitals should be able to scan a person's fingerprint or input PAN or adhaar number and system will instantly indicate if this person is eligible for 48 hours emergency cover- no pre-auth, no reimbursement. Anything needed to save a life- medicines, consultancy, surgery, checkups, admission- should be covered under this policy

Purpose: When an emergency strikes, family members may not be with the tax payer- takes precious time to figure out what coverage he/she has, how much treatment costs, where to take etc- By moving first 10k of tax paid towards an medical emergency fund, major headache is taken off the minds of tax payer- that should they face a life threatening incident, they are fully covered.

Insurance companies can be asked to give a discount to income tax payers on insurance premium as the emergency care is covered by govt.

Regular treatments, long term illness etc can be kept out of scope of this scheme. 

Benefit 2: Property Purchase benefit once in 10 year

Once in 10 year, allow income tax payer to register a property up to taxable income declared in 10 years, without registration fee, stamp duty and other charges.  

Example: Someone earning 10 lakhs per year, if he/she buys a property worth 1 crore after 10 years, waive off all charges. We can mandate that entire payment to builder/seller should be done online, so that cash & black money problem in real estate can be eliminated. (True value of a property comes to light)

Benefit 3: Exclude passive income from tax up to a limit

As of now, there is only 1.25 lakh long term capital gain exemption for everyone.Everything else is taxed- interest income on savings account, FD, dividend, short term & long term capital gain and so on. This feels very unfair to taxpayers as the income which is invested is already taxed.

I propose the following

• Those under 30% income tax bracket- passive income up to 30% of last year's declared income is exempted from tax. (someone who paid tax on 45 lakh income last year, should be able to earn upto 15 lakhs next year tax free, from interest, dividend, capital gain etc)
• Those under 20% income tax bracket- passive income up to 20% of last year's declared income is exempted from tax. (someone who paid tax on 20 lakh income last year, should be able to earn upto 4 lakhs next year tax free, from interest, dividend, capital gain etc)
•  Those under 10% income tax bracket- passive income up to 10% of last year's declared income is exempted from tax. (someone who paid tax on 15 lakh income last year, should be able to earn upto 1.5 lakhs next year tax free, from interest, dividend, capital gain etc)

Benefit 4: Complimentary fastag recharge

As of now, there is only 1.25 lakh long term capital gain exemption for everyone.Everything else is taxed- interest income on savings account, FD, dividend, short term & long term capital gain and so on. This feels very unfair to taxpayers as the income which is invested is already taxed.

I propose the following

• Those who paid 30% income tax- credit 3000 INR to their fastag
• Those who paid 20% income tax- credit 2000 INR to their fastag
• Those who paid 10% income tax- credit 1000 INR to their fastag 

Keep this as a use it or loose it scheme- to use this car owners will go on trips, spending on fuel, food and other things, boosting economy

Benefit 5: Emergency fund

Offer to repay a part of tax paid if the taxpayer faces situations such as loss of job, medical emergency etc

I propose the following

• Those who paid 30% income tax- should be able to get upto 30% of what they paid so far in case of emergency
• Those who paid 20% income tax- 20% cashback
• Those who paid 10% income tax- 10% cashback

SB interest if they redeem this before retirement, FD interest if they chose to redeem it post retirement (like 65 years)

Benefit 6: Extra time

Those who pay higher tax, should get more time to file returns, advance tax etc

I propose the following

• Those who paid 30% income tax- 30 days extra time
• Those who paid 20% income tax- 20 days extra time
• Those who paid 10% income tax- 10 days extra time

This will help CA community to finish work on regular customers first and get extra time to focus on premium customers in 30% bracket. 

Benefit 7: Additional voting rights

Tax payers should have an evoting right (similar to evoting on shares) on major govt decisions which involves spending tax payers money. This will prevent govt from spending carelessly on freebies to lure votes.

Benefit 8: Refund automatically adjusted against next year's tax/advance tax

Any delayed refund should be adjusted against next year's advance tax/TDS or credited with 12% interest

Benefit 9: Remote attendance for court cases etc

An income tax payer should not be forced to take leave from work, spend on travel etc on civil court cases- such as divorce/custody battles, petty notices and other civil cases. If they have to take leave from work, spend on travel stay etc (particularly when court case is deliberately filed in a far away city)- it is loss of revenue, time and effort- Allow them to attend court cases on zoom or google meet, or from a nearby session court room digitally connected to court where case is going on. This will ease lots of headaches for taxpayers fighting long term court cases for no fault of theirs

Benefit 10: Allow family filing

MP Raghav Chadda has also mentioned this. Allow a family to file tax together-like one person earning 45 lakhs and paying 15 lakhs in tax while 3 other people not earning anything- all 4 should be able to file together and at 12.75 lakh exemption allowed per person, family should be able to save the tax paid.

You can put some condition like immediate family/blood relations only (Father, mother, husband, wife etc) and all PAN card holders should be in same address. 

Let me know what you think of this.

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