Letter to BS: Ease of paying tax is important for living, doing business

The changes proposed in Budget to the personal income tax system — simplified for incomes up to Rs 15 lakh per annum, the taxpayer’s charter, the reduced interface with tax bureaucracy — indicate a welcome move towards easier compliance that could widen the tax net. Taxpayers with an annual income of Rs 5 lakh to Rs 15 lakh will now have an option of paying taxes at a lower rate provided they forgo assorted exemptions. The government’s intention could be to move taxpayers to a low-tax regime with few exemptions, which explains the nudge — doing away with 70 of the 120 exemption categories that income tax payers can currently use to lower their tax liability. I think that the ease of paying taxes is an important consideration in determining ease of living and doing business. The measures mark an effort in this direction. Nobel prize-winning economist Richard Thaler would approve — if you want people to do something, make it easy, he said.

Tarique Anwar, Bengaluru

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