There are about 3 crore 30 lacs assessees who were given P.A. Numbers. Exact number may vary as allotting P.A. number is a continuous process. There are about 6 crore eligible tax payers which can come within the tax net, if deductions under Section 80L and rebate under Sections 88, 88B, 88C are deleted.

The levy of Income-tax is suggested on the basis that every income is taxable. (i) it is taxable at very low rate, (ii) an assessee has to contribute certain percentage of tax towards pension, (iii) an assessee is relieved of his worries on his retirement as he is contributing towards pension fund on the basis of income he has paid. The assessee is assured pension proportionately on payment of tax. On the above basis, following tax rate should be enacted:

Illustrations:

(1) An assessee earning Rs.1 lac will have to pay Rs.4000.
(2) An assessee earning Rs.1,50,000 will have to pay Rs.9,000. The average tax rate will be worked out to about 6%.
(3) As assessee earning Rs.3 lacs will have to pay Rs.39,000. The average tax rate will work out to be about 13%.
(4) An assessee earning Rs.5 lacs will have to pay Rs.79,000 which works out to average 16%.

On an income of Rs.10 lacs, an assessee will have to pay Rs.2,30,000 tax, which works out at average 23%.

Above Tax rate is the least tax rate and which may be imposed and recovered in India compared to other nations of the world.

Every citizen would like to pay the tax honestly provided he is assured of pension in old age of his retirement or at the age of 65 years. He should get freedom from earning and should not have worries with regard to savings. The Central Government is following low rate of interest policy and it has become extremely difficult to maintain oneself.

The following suggestion is made:

At present the tax payer is paying Income-tax at the rate of 10%, 20%, and 30%.

The suggested Income-Tax and Pension-Contribution works out as under:

The tax payer has to pay :

Income-Taxable At present paying

Rs.1,50,000 Rs. 9,000 Tax
+ 3,600 Contribution towards Pension
------------
Rs.12,600 Rs.19,000

Rs.5,00,000 Rs.79,000 Tax
+ 17,600 Contribution towards Pension
------------
Rs.96,600 Rs.1,24,000

Rs.10,00,000 Rs.2,29,000 Tax
+ 37,600 Contribution towards Pension
---------------
Rs.2,66,600 Rs.3,01,000

Under the suggested scheme the assessee will pay less than the present tax rate with added advantage of getting pension at 65 years. As every income is made taxable, there can be 6 crores assessees and income tax recovery can be more than Rs.1,50,000 crores which is now only 81,000 crores (actual 2002-2003). There will be elimination of black money, as all exemptions and rebate are to be deleted. Since last two years, there is revenue deficit of Rs.95000 crore in order to spend non plan expenses - Interest Payment Defence, Pay, Pension Subsidies and Grants. The revenue receipts can increase considerably to about Rs.40,000 crore, if all suggestions are implemented