Indian Finance Minister Urged To Abolish Wealth Tax

by Lorys Charalambous, Tax-News.com, Cyprus

22 January 2002

In a pre-budget submission, Gujarat Chamber of Commerce and Industry president Kalyan Shah has asked Indian finance minister Yashwant Sinha to abolish wealth tax and to make income tax the main instrument of tax revenue.

"This is all the more necessary in view of the fact that estate duty, gift tax and expenditure tax have already been abolished," he said in a detailed pre-budget memorandum to the Minister. For personal taxation, Shah wants the maximum marginal rate of tax for individuals to apply to income exceeding 2m rupees.

Retired persons and senior citizens having no business or professional income should not be subjected to capital giants tax as they need money to make living from realising their assets, Shah says.

Shah has called for simplification of the law on deduction of tax at source. At present the law covers 22 different types of payment, each having its own set of rules and separate forms. Ideally, there should be only one form and a single date on which it should be submitted.

Shah has also suggested introduction of a passbook system for recording payments of all direct taxes, enabling the department to have a complete picture of taxes due from and paid by assessees. Also, interest computation on delayed payments will become very easier.

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