Black money is nothing but â€œtax-evaded incomeâ€. The accumulation of black money has gained momentum over the years and the reason behind it includes corruption, faulty tax regime and many more. Â The government should make enabling amendments / provisions in the Income Tax law which will facilitate tax payers to disclose more real income in the tax returns. The best and easiest way of doing this is to enhance the threshold exemption limit for taxability.
For the financial year 2011 â€“ 2012, (April 2011 to March 2012) the maximum exemption limit for individuals have been fixed to Rs.180000 and for women assessee to Rs.190000. But if the basic exemption limit is enhances, atleast to Rs. 500000 then, it would come as an incentive for tax payers to disclose higher income, more aligned to their actual income.
Â This will serve two purposes: Firstly it would increase the thrust of saving among people which would increase their investment in deposits, they would disclose their income and with greater savings to the middle and upper class people, the tax liability and disclosure would be more transparent than ever before. Secondly government could invest this deposits which would fetch them effective return, leading to economic growth and curb inflation.
Â Since Direct Tax Code (DTC) is expected to be introduced from next year, Government strives an indirect way to unearth tax – evaded income from the common people. The proposal to raise the income tax exemption threshold limit through DTC, from the existing Rs.180000 per annum to Rs.200000 has a potential to provide tax relief of upto Rs.2000 which will increase the disposable income, more employment, and it will definitely help overall growth.
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