We can classify India in many ways. One of these is in terms of the burden that Indians have to bear. On this basis we can categorize our country as rich class, middle class and poor class. These three classes can be further categorized in various subsets

WE CAN classify India in many ways. One of these is in terms of the burden that Indians have to bear. On this basis we can categorize our country as rich class, middle class and poor class. These three classes can be further categorized in various subsets. For example, rich class can either be super rich or rich; it can also be ‘Deserving Rich’ or ‘Undeserving Rich’. Deserving rich people are those who have really worked hard and have reached the peak. Undeserving rich are those who have made lot of money through nefarious activities like bribes and what not. Poor class can also be classified into two groups Deserving Poor and Undeserving Poor. The former category includes those people, who if supported by the Government or NGOs etc. emerge out of poverty, and the latter are those who will never get out of poverty no matter how much help they receive. Middle Class can also be classified in terms of those who are just above the poverty line, and those who are just below the rich people.

We shall briefly focus on the middle class in terms of taxation. Middle class people bear most of the tax burden, and also help the economy go ahead in terms of economic growth.

This class is really disenchanted. These small savers always welcome the Government initiatives no matter how small they are. But unfortunately, every year when the Budget is announced there are no such initiatives. In the present times, tax code is a labyrinth of sections, sub-sections, and exemption. Most of the tax payers are utterly bewildered by the maze of bureaucratese; even seasoned professionals occasionally lose track of some of the more obscure clauses. In fact, what the Government should do is to slash exemptions while simultaneously reworking both the tax rates and slabs on which they become applicable. All exemptions and deductions should be scraped. It is an effort worth making. The objective must be to have a tax code that can be written on one page. The Government must empower its citizens. One way of doing so is to give them more disposable income, and trust them to take responsibility for their future.

In essence, the tax laws are too complicated at present. The Act should be direct, simple, comprehensive and free from exemptions.