INCOME TAX IN INDIA:2026
SARASIJ MAJUMDER
PREAMBLE: Last Week, the government released the draft Income Tax Rules, proposing a bunch of changes under the new Income Tax Rules, 2026. It looks somewhat different than what proposed by F.M. on the day she tabled the Budget and looks like washed up version of 2023! A typical SEE-SAW movement!!
Let us look into the I. T. Act, a bit historically. And also review.
BRIEF HISTORY:
In India, Income Tax was introduced for the first time in 1860, by Sir James Wilson in order to meet the losses sustained by the British Government on account of the India’s First War of Independence (blackened as Sepoy Mutiny of 1857). Thereafter, several amendments were made in it from time to time. In 1886, a separate income tax act was passed. After several revisions, in 1918, a new income tax was passed and again it was replaced by another new act which was passed in 1922.This Act remained in force, even after Independence, up to the assessment year 1961-62 with numerous amendments. The Income Tax Act 1961 has been brought into force with 1 April 1962. It applies to the whole of India and Sikkim. Since 1962 constant “TINKERINGS” have been made in the Income Tax Act by the successive F.M.s while presenting Union Budget every year. Every amendment looked like a thoughtless experiment by a group of Juvenile BABUS!
BOUNDARY:
Since I am a Retired Person, a Senior Citizen, living in India, not dependent on Children, files I.T Return, and not earning any Pension—I will discuss from the point of view of people of our class and category, and propose a remedy to reduce their sufferings because of this Demonic Tax imposed by successive GOIs, in independent India.
DEFINITION OF INCOME:
There are two types of INCME—Earned Income, and Un-earned Income.
Earned Income is Salary, Wage, Commission, Payment for services rendered, and Fees (received by Physicians, Lawyers, Consultants..).
Un-earned income is Dividend, Interest, Rent.etc. Here, mostly a previously earned income (IT paid) is converted into Capital, which is used to generate an un-earned income. I strongly suggest some wisdom is necessary before Tax is applied on this type of income.
TAX PROPOSAL:
I propose—a gross indirect income up to Rs. 30 Lakhs per annum shall be income tax free. And yearly increase of this slab shall be linked with Rate of Average Monthly Inflation expressed in %, Declared By RBI. However- a better method here is welcome.
Earlier, Long Term Capital Gain was not Taxed. Dividend received was not Taxed. My proposal includes taxing this part of Income after a threshold (Now Rs.30/-L) limit.
And all indirect income shall be taxed @10% beyond Rs.30L, and upto Rs. 50L, @15% between Rs. 50L. and upto Rs.75 L., and @ 20% beyond that.
A Senior Citizen, if he visits and stays with his children abroad, for some time or other, every year—the relevant clause shall apply to decide his residential status.
ABUSE OF TAX MONEY RECEIVED BY GOVERNMENT:
- Both, State (MORE), and Central Government are guilty in this respect.
Jagannath Ramanuj Das v/s State Of Orissa —AIR 1954:
Supreme Court held “…a tax is undoubtedly in nature of a compulsory exaction of money by public authority for public purpose…”
This money is grossly abused to purchase votes in an indirect manner, in various ‘PUSHTI BHATA’, and to fight criminal cases against Ministers, and their trusted Public Servants.
Above shall be stopped—immediately.
2.0 Subsidy to Farmers, fertilizers, and protection price also need to be reviewed.
SPECIAL TAX:
I am in favor of short-term special tax to meet Calamities, those can’t be planned, like a War, or Epidemic (COVID). Mrs. Gandhi imposed Tax on us after 1971 War.
REFERENCES: — ALL ARE IN PUBLIC DOMAIN. OPINIONS PRESENTED BELONGS TO BLOGGER.
