Today I wish to discuss one interesting thing about Taxes in India.India is one of the highly taxed countries in the world. There are so many taxes in India. Income Tax is also considered as one of the important taxes in India. Well, as far as Tax is concern. I sincerely believe that “Tax is the mechanism to collect the money from Good People and use it for the Bad People” Actually it should be other way. The State muscle power should be used to recover money from Bad People and to use it for Good people. Anyway, I wish to discuss interesting thing about Income Tax in India. Income Tax is badly hated by the people because it fixes the responsibility of the specific person and tax is recovered. There is reason to believe that if Income Tax in India is abolished, there there will be miracles, and it will boost Indian Economy.
Okay lets discuss in detail what will be the miracles and benefits to Indian Economy, if Income Tax is abolished.
1. Complete eradication of Black Money from Indian Economy:
The moment the Income Tax will be abolished form India, there will be complete eradication of Black Money. Yes because immediately from that moment the difference between the black money and white money will be finished. Black Money is nothing but the unaccounted money to escape Income Tax. And if that reason itself will cease to exist, then there will not be any reason to have any unaccounted money. Each and every penny will be availed for the use and betterment of economy
2.Indian Economy may become the Largest Economy in the World:
Yes! it can happen.Today India is one of the 10 largest economies in the world.And most of the economies which are bigger than India are the developed economies where there is existence of very less black money. Probably today also India is the biggest economy in the world. But unaccounted parallel black economy which may be as big as 1/4th or even bigger of the white economy. And if Income Tax is abolished, then there will start quick process to move unaccounted money into mainstream economy. Money will come into mainstream economy through banking system and Officially India may become largest economy.
3.Banking in India will become Extremely Strong and Powerful:
Yes, if income tax is abolished there will be no need for the people to hide cash in cupboards, lockers, pillows and beds. If there is not income tax only, obviously money will be deposited into banks, to seek genuine and proper returns. Extremely huge amount will come into banking very fast. There will be golden days for Banking in India. And banking is the most important tool to control credit in the economy. So strong banking will result in strong economy.
4. Credit will be Cheaper and that is very good for Business:
As discussed above, if income tax is abolished, then huge money will flow into banking. So there will be more supply of credit than its demand, and thereby the interest rates will come down drastically. Currently interest rates in India are more. And more interest rates means costlier credit and huge fiance cost for businesses. Due to huge finance cost for businesses, they face lots of bottlenecks. Once Income Tax will be abolished, interest rates in India will come down to match with developed economies in the world, and finance costs will come down.
5. Stock Market will Move Up like Rocket!!
If Government of India announces the abolition of the Income Tax, it will be the most amazing news ever for the stock markets in India. The stock market will skyrocket. If the news of abolition of income tax flashed, within minutes, there will be surge in the stock market. There is very much possibility that the almost every stock in Sensex and Nifty will hit upper circuit. Because there will be no reason to not to purchase the stocks of these reputed companies at that moment. There will be amazingly good sentiment in Stock Market of India. There may also be huge increase in the volumes also. BOOM BOOM BOOM for Stock Markets in India!!!
6.Huge Inflow of Foreign Direct Investments (FDIs):
India is the Largest Democracy in the World. Also it is the Second Largest populated country and will soon take over China. And Interestingly possesses the largest young population. This itself makes India as the most attractive place to make investment for any business because it it Huge Market. Of course if there will be news of abolition of Income Tax also, then definitely there will be HUGE increase in the Foreign Investments in India. Because in that case India will be more attractive place to invest and to have handsome profits. These FDIs will boost Indian Economy like anything!
7. Increase in Employment Opportunities because of Better Business Prospects:
Just imagine No Income Tax! This will definitely encourage young talent, to come forward to be self employed! More and more people will come forward to be part of New Ideas, Startups, Ventures, because of better environment for business. Because they can be assured that they would not have to bother about income tax. As there will be reduction in finance cost, and this will help to raise capital more easily. As mentioned there will also be more foreign investments in India. All these things collectively create HUGE employment opportunities in India.
8. Balance of Payments of India will improve:
Yes! As mentioned above there will be huge inflow of FDIs if income tax is abolished. And obviously this will create more demand to INR (Indian Rupee). Because the foreign investors would have to purchase INR to invest in India. This will increase the value of INR against USD in Forex market. There is reason to believe that INR for one USD can come down as low of 30 to 35. This will obviously make the Imports cheaper. And as India is dependent on imports of Oil and Petroleum products, it will definitely improve Balance Of Payments.
9. No compliance cost:
Income Tax provisions in India today are very complicated, and far away from simplicity. So many Income Tax provisions are complicated and ambiguous.Income Tax Act in India is insanely difficult to understand for common man. In fact so many Tax Consultants are even confused about many IT provisions. This taxes the not only tax but the irritation and cost of complying the Income Tax Act. Many of the companies have to spend huge amount of money on this, to employ ‘experts’ in Income Tax. In addition to this many assesses have to get involved in Tax Audits, Income Tax returns,TDS returns, assessments , compliance s, litigation s. etc. I wounder business houses should concentrate on their business or on these insane things. The moment Income Tax will be abolished, all these irritating and useless things will also become unnecessary. And there will be very good relief for Business, and people can concentrate on their business in better manner!
10. Judiciary will be able to concentrate on more important cases:
There are so many litigations pending with Judiciary of India, since longer time. If Income Tax will be abolished, then there will not be any litigations cases related to Income Tax. And the Judiciary can spend its valuable time on more serious cases of crime like murder, terrorist acts and the victims can get the justice faster. The Courts will not have to spend their valuable time to decide on worthless things like if some expenditure is allowable deduction in IT Act or not.
These ten amazingly positive things can happen if Income Tax will be abolished. Of course ‘experts’ will definitely argue that, what about Government Revenue, if Income Tax is abolished. To answer this I wish to share one interesting thing. Before some days, there was one post in social media. According to this post if black money parked in Tax Heaven countries is brought back to India, then there will be no need to have tax in India. But interestingly it is other way round. If the income tax itself will be abolished from India, then all the black money parked in tax heaven countries, will come back in India, and probably the revenue of the government will be taken care. Yes, in fact economy will become so strong and broad that enough revenue for the government will be generated from the other sources of revenue.
Friends, I believe that Income Tax in India is regressive and injusticeful. That is the reason I spent time to write this long article to discuss about this. Thanks for reading this article patiently and hope you found it useful and meaningful. If yes please share it on every platform,so that it will reach with large number of the people, and one day abolition of Income Tax will become reality!!
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