Question

I will definitely down vote, if essay is inappropriate 4) What will be the better tax system for India in future? (Do not select multiple answers and type your answer)
a) Slab system
b) Fixed rate
c) No Tax
d) Tax on bank transaction
e) None of the above
answer based on information, else skip it

Answer 1

I believe the answer to this question is a)Slab system. This is because, in rest if the options, 'Tax on bank transaction', 'no tax' & 'fixed rate', they are not justifiable at all. For example, take 'Tax on bank transaction'. This means that whenever a person withdraws any amount from his bank account, that person is liable to pay tax, which is not fair for the common people. This is because, already they're paying tax on salaries(Tax Deducted at Source on salaries)/paying tax on income,hence, again taxing their withdrawals would amount to double taxation, and would annoy the general public no end. They'll feel cheated if asked to pay tax for withdrawing their own money from their own bank account.

Next comes 'No Tax'. This is not at all a feasible option. This is because, the country needs funds to be run, for building infrastructure, to maintain the public transport, roads, to pay the public servants,etc. Hence whatever tax is paid by the general public in the form of direct and/or indirect tax is extremely necessary, and there cannot be a situation where all kinds of taxes are abolished by the Government. Next comes the 'Fixed Rate' option. There are billions of people in this country having various levels of income. Hence, there cannot be a fixed rate of tax for all of them. If suppose the Government fixes a rate of 30% per annum tax (fixed rate) for everyone.For a lower middle class person,who earns Rs.24,000 per annum, this amount will be difficult to pay, since, it is a huge amount for him. At the same time,for an extremely rich person, who earns in crores of rupees, 30% tax p.a. is hardly anything. Hence, this is not an option as well.    

The last option is 'Slab system'. This is a better tax system for India, because, compared to all the above options, this is by far a fairer system. Also, it is a slab rate system, which means it contains income amounts from one range to another, which considers all strata of society. Like for example, the first slab could be upto 5 lakhs p.a. no tax, then above 5 lakhs to 8 lakhs p.a. 10%, then 8 lakhs to 10 lakhs p.a.20% and above 10 lakhs p.a.30%. These slab rates cover pretty much all ranges of incomes and hence is fairer than the rest of the options.Even this system has its disadvantages, but among all the above options, I believe the option a) Slab system is a better tax system for India in future.