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Wealth Tax/Income tax modification
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Author:  kmoksha [ Tue Sep 30, 2014 6:26 pm ]
Post subject:  Wealth Tax/Income tax modification

An important change in wealth\income tax proposal by Rahul Chimanbhai Mehta

I have put my tax proposals in chap-25 of rahulmehta .com/301.htm. The main proposals are --- remove excise, VAT, service tax, GST and all small taxes. And instead use income tax and wealth tax.

I am modifying wealth tax proposal as following.

1. The income tax paid plus 30% of salaries paid will be deducted from wealth tax. And if income tax plus 30% of salaries paid exceed wealth tax due, the difference will become Wealth Tax Credit for next years.

Examples

(1) say a person is running business.

Say he earned Rs 30 lakhs and paid income tax of Rs 10 lakhs.

And he had paid salaries of Rs 2 crore.

And he has wealth of Rs 200 crore.

Then wealth tax will be Rs 200 lakh. But set off he will get will be Rs 10 lakhs plus (Rs 2 crore * 30% ) = Rs 10 lakhs + Rs 60 lakhs = Rs 70 lakhs. So wealth tax payable = Rs 200 lakhs - Rs 70 lakhs = Rs 130 lakhs. i

(2) say a person is running business.

Say he earned Rs 30 lakhs and paid income tax of Rs 10 lakhs.

And he had paid salaries of Rs 2 crore.

And he has wealth of Rs 20 crore.

Then wealth tax will be Rs 20 lakh. But set off he will get will be Rs 10 lakhs plus (Rs 2 crore * 30% ) = Rs 10 lakhs + Rs 60 lakhs = Rs 70 lakhs. So wealth tax payable = Rs 20 lakhs - Rs 70 lakhs = - Rs 50 lakhs. i.e. he will get WTC = wealth tax credit of Rs 50 lakhs.

So next year say income and salary paid = Rs 0 . the wealth tax will be Rs 0 , but WTC will decrease to Rs 30 lakhs.

And WTC next year will be Rs 10 lakhs, and weath tax payable next year will be Rs 10 lakhs, and WTC will be zero.

WTC will get added lifelong. But not inherited.

With WTC and provision of subtracted income tax and 30% of salaries paid from WT, the wealth tax rate can be increased to say 3% and Inheritance tax can be removed.

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