GS2 (Government policies)
The government announced that it has gotten almost USD 10 billion in the recent Income Declaration Scheme. What is this scheme? Is this only a short term measure?
Best answer
Aman Chauhan wrote the best answer for this question and got a score of 5/10 (if the best answer is an image, it cannot be uploaded here, hence scroll down to see those). The answer is being reproduced below for everyone’s convenience. Of course these answers can always be improved. (Best answer of a particular only involves those given on that day, later answers may not have been checked)
According to economic survey India’s direct tax collection is very narrow .Our country is a peculiar case of minimum tax payers among such huge population .Roughly a million agree to having income above 10 lakh rupees .This shows a massive under reporting of actual income and large scale tax evasion is being practised .
To combat this menace income declaration scheme was introduced with following features –
A- opportunity to declare undisclosed income and pay taxes ,with a 30%tax of then value along with 25% surcharge
B.immunity from Benami transactions act,IT act and Black money act of 2015
C.confidentiality of identity thereby promoting such declaration .
But,it’s a short term measure which expires on 30th September ,same kind of schemes were seen in past too with scanty revelations .Although, this time around govt has collected 30000 crore rupees as tax to be used in rural infrastructure and development.
BUT , certain Long term steps have to be adopted like –
1.widen tax to GDP by expanding tax net
2.tax large farm incomes
3.rationalise subsidies
4.simplify tax filings and returns
5.strengthening of e-nivaran portal to fastrack tax payers grievances .
6.check corporate tax avoidance
7.Behavioural change among tax payers by moral suasion
Although ,punishment helps in sending a strong message to the society ,still such schemes from time to time should be resorted to in order to increase the tax collection .After all it is this money which funds our defence ,infrastructure and even social welfare .
