Facilities Govt should give to income tax payers

Income tax payers in India are real minorities. Revenue from Income tax fills up 19% of Govt of India’s income, so income tax paying salaried middle class should be a respected community of citizens but this group is abandoned because they can’t evade tax unlike businessmen or farmers. 35% goes in income tax+cess, then 28% goes in GST, even more in tax on interest, investment returns and so on, taking away as much as 60-70% of income. But income tax payers get no respite in case of any emergency or crisis.

Below are some simple ideas Govt should implement, costing only a small portion of what income taxpayers give to the Govt. These initiatives will offer some kind of protection and respite to taxpayers and make them feel good the Govt is with them.

Benefit 1: Job loss financial support.

Job loss is a huge risk for private sector employees. They have no protection, no pension and they operate daily with a risk of losing their job and source of income overnight. Govt can set aside small portion of income tax collected and give it back to individuals if they lose their job due to no fault of theirs (Company going bankrupt, mass layoffs etc)

This small fund will help individuals survive a few months easily, cover their basic expenses, upskill and find some other job.

#	Total lifetime tax paid till date	Job loss financial support
1	<1 lakh	Nil
2	1 to 5 lakh	10k per month * 6 months
3	5 to 10 lakhs	25k per month * 6 months
4	10-20 lakhs	40k per month * 6 months
5	20 lakhs+	60k per month * 6 months

#2 Emergency medical support

Everyone faces unexpected emergencies- road accidents, natural calamities, other accidents and illness, which drains the entire savings of a middle class family. If Govt can take away this risk, provide certain assistance free of cost, tax payers will feel relieved Govt is with them and they are protected in case of emergencies.

#	Total lifetime tax paid	Medical Expense coverage in case of accidents & emergencies
1	<1 lakh	Nil
2	1 to 5 lakh	First 24 hours all emergency treatment free for self
3	5 to 10 lakhs	First 48 hours all emergency treatment free for self & spouse, parents
4	10-20 lakhs	1 week of free medical care, hospitalization for self & immediate family members
5	20 lakhs+	Unlimited coverage till discharged from hospital for self & immediate family members

Govt has to set aside a small portion of income tax earned towards health insurance corpus and fund tax payer’s emergency expenses from this fund. This way, taxpayer gets some breather when they face an emergency- whatever is needed urgently- like an operation, tests, medicines, admission etc taxpayers don’t have to worry about or scramble for money. Hospitals can key in patient’s PAN/Adhaar, check his/her eligibility on govt portal and provide free treatment accordingly.

Patients get a few days time to figure out how to arrange funds for subsequent treatments.

#3 Income tax exemption for post retirement income

Someone who has paid income tax all their life, can be excluded from income tax on interest earned from deposits & other investments, once they cross the age of say 60 years. As their earnings would have dropped by then, relaxing tax on interest and investment earning will give them some breather.

#4 No income tax on interest earned as long as total savings is less than annual salary

If someone is earning 15 lakhs an year and has only less than 15 lakhs in bank in FD & Savings, interest earned on this should be tax free. This will give some respite- currently we get 2.5% on SB, 5% in FD and in that 33% goes to govt, effectively leaving is with peanuts- 1.5% in SB, 2.5% return on FD in post tax returns.

These are the 4 ideas if implemented, Modi govt may win back the trust of middle class, who are currently thoroughly disappointed with the Govt not providing any relief.

Let me know what you think.