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Draft   to   enact   procedure  
TX.01   ---   Procedures   to   improve   Income   Tax   collection






DRAFT-1 : Improving citizens' control over Income Tax Dept

 
Section   1   :   Preamble
  This Act is to create a less nexusprone procedure to improve citizens' control on the officers of the Income Tax Dept.

Section   2   : Format of the act
2.1 Many of the clauses of this law are procedures or instructions, which may be an order or a request. The clause has list of persons for whom that procedure/instruction is meant for.

Section   3   : Appointments of senior officers and their main powers

[Person responsible for this procedure/directive: PM ; Purpose: Appointment of senior officers] The PM will appoint 1 Registrar and 1 CGTC (Central Govt Tax Collector).

Section   4   : Procedure for citizens to replace CGTC
4.1 [Person responsible for this procedure/directive: Registrar; Purpose: allowing a citizen to be candidate for CGTC] Any citizen of India who wants citizensí Approval for the position of CGTC can register himself with the Registrar. The Registrar will charge a deposit of Rs 20000 and a monthly fee Rs 2000 per month. There will be no fee after over 1% of ALL citizens of India have approved the candidate.
4.2 [Person responsible for this procedure/directive: Registrar, Registrarís clerks] A citizen residing in India can present his ID and specify the serial numbers of at most 5 candidates he Approves for the position of CGTC. The clerk will enter the requests in the system and give the receipt to the citizen. The citizen to change his choices any day any month.
4.3 [Person responsible for this procedure/directive: Registrar] The clerk may charge a fee of Rs 2 to Rs 5 to the citizen.
4.4 [Person responsible for this procedure/directive: Registrar] The citizen can withdraw his Approvals any day. There will be no fee from withdrawing the Approvals.
4.5 [Person responsible for this procedure/directive: PM ; Purpose: Replacement of CGTC] If any candidate for the seat of CGTC is approved by highest number of citizen-voters and over 25% of ALL citizen-voters of India, the PM will appoint him as new CGTC within 2 days. If any candidate is approved by over 25% of ALL citizen-voters and his approval is 1% more than existing CGTC, the PM will appoint him as new CGTC within 2 days.
4.5 [Person responsible for this procedure/directive: Registrar ; ] The word "citizen" in the context of Approval, means citizen above 18 and registered voter resident in the city

Section   5   : Jury Trial against an Income Tax Officer

The citizens can expel any Income Tax Dept's employee after a Jury Trial as described "Jury System over Central Govt Staff" Act (*)

Section   6   : Other Details
6.1 If the officer does not execute a procedure or ignores an instruction stated in this Resolution/Act, a citizen can file a complaint before the Grand Jurors. In case there are is no Grand Jury, the citizens can appeal to the PM to setup a Grand Jury. But under this law, a citizen cannot complaint before PM, Corporators, PM, MLAs, PM, or MPs.
6.2 The Jurors will judge this Act, guidelines, intentions as well as the facts related to the case


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(*) -- To see the text of proposed "Jury Trial over Central Govt Staff" Act, please click here.



  DRAFT-2 : Tax-ID Act
 
Section   1   :   Preamble
  This Act is to create procedures that would improve book-keeping, that would reduce revenue evasion, and thus tax collection, without increasing discretionary powers of the tax collecting officers.

Section   2   : Issuance of IDs
2.1 [Person responsible for this procedure/directive: CGTC i.e. Central Govt Tax Collector] The CGTC will issue a tax-ID for each citizen, working foreign national, company, trust, HUF etc, or he will use National ID if a person/company etc already has such ID.

Section   3   : Attaching tax-IDs with bank accounts and checks
3.1 [Person responsible for this procedure/directive: Bank Managers, Jurors] Six months after passing this law, the Bank Managers of ALL banks will freeze the accounts in their branch whose account-owners have NOT registered their tax-ID with the accounts, including those who have NOT yet obtained the tax-ID. The Jurors may impose a prison sentence of upto 1 year on the bank managers who DO NOT freeze the ID-less accounts. At the request of the account-owners, the branch may also print the tax-ID of the account-owners on the check, along with date on which checkbook was printed. Also, if the account owner wishes, the branch MUST change his account number to same as his tax-ID, with a prefix "A". All other accounts must have first letter other than "A".
3.2 [Person responsible for this procedure/directive: Bank Chairman, Banks' branch managers] A check writer may mark a check he writes as "payee-ID" on upper left corner, and write the tax-ID of the payment reciever after their names. If a check is marked as "payee ID", then bank branch manager will NOT directly encash it and will only allow its deposit in an account which has the names and tax-IDs as specified on the check.
If a payee-ID check has only one name and tax-ID, it can be deposited in an account ONLY if the account has ONLY one owner with that name and tax-ID. If a payee-ID check has multiple names, it MUST have same number of tax-IDs or else it will be considered void. And it can be deposited ONLY in an account whose owners are ALL the names/tax-IDs and specified on the check and no additional owner.
3.3 [Person responsible for this procedure/directive: Jurors] The Jurors will imprison a bank branch manager or concerned bank officer for upto 1 year if he deliberately deposits a payee-ID check into an ID-less account or an account with a different tax-ID.
3.4 [Person responsible for this procedure/directive: Banks' branch managers] The branch manager will ensure that if an payee-ID check is presented in a bank, from a foreign bank branch situated outside India for clearance, the manager will return the check without giving any credit.
3.5 Paperless equivalent of payee-ID check : A party may send an instruction to his bank, by any means as decided by bank and approved by RBI, asking his bank to pay funds to a counter-pary in same or another name. If the tax-ID of the counter-party is specified, the payment would be considered same as done by a payee-ID check.

Section   4   : Citing IDs while filing expenses, and other transaction
4.1 [Person responsible for this procedure/directive: CGTC] No deduction without citing tax-ID : In the income tax returns filed by individuals, the CGTC and his staff will ensure that, for every expense that person wishes to take as a deductible expense, he specifies the tax-ID of the person to whom he made the payments. No deduction will be allowed if the tax-ID is NOT specified, unless payment reciever is situated outside India, and the payment reciever does NOT have a tax-ID issued by GoI. In such case, the payment giver may claim an expense without providing tax-ID.
4.2 [Person responsible for this procedure/directive: All Govt Officers, Jurors] 1 year after passing this law, ALL Central, State or Govt officer MUST pay ONLY by payee-ID checks. If the payment-receiever is outside India, and does NOT have tax-ID issued by GoI, then ONLY an officer may pay by non-payee-ID check. The Jurors may expel the officer who gives a non-payee-ID check or pays by cash.
4.3 A person/company MUST pay ALL interests/dividends by payee-ID checks ONLY. If the interest/dividend is paid to a person who does NOT have tax-ID, such as person/entity outside India, the company must deduct taxes at source (TDS) at the rate of highest marginal income tax rate, and pay only the rest. The TDS must be deposited with CGTC's designated officer within 15 days after payment of interest/dividend. The interest/dividend reciever may later collect the tax deducted, if his tax payable is less that taxes deducted.
4.4 [Person responsible for this procedure: Banks' Branch Manager] If the account-owner has requested, then everytime a check is written or deposited (and cleared) by the account-owner, the branch will send an electronic message to CGTC's designated transaction-reporting server, along with names/tax-IDs of party and counter-party.

Section   5   : Registration of IDs on properties
5.1 [Person responsible for this procedure/directive: Companies's owners, partners or directors, Jurors] Each company will obtain its partners' and directors, and ALL its shareholders' and bonholders' tax-IDs. The company will also report to CGTC about how much share/bonds each holder owns along with his tax-ID. If a holder does NOT provide his ID, the company MUST freeze his shares/bonds, and freeze dividends/interests/redemptions and report his name and address to CGTC. The company MUST open a current account in an SBI branch, and deposit ALL the dividends/interests and redemption in those account. The Jurors may confiscate the shares/bonds and interests/dividends and redemptions, if ID is NOT registered for over 10 years after passing this law.
5.2 [Person responsible for this procedure/directive: owners of land/building, land record officer] The LRO (Land Record Officer, or officer in-charge of maintaining land/building records) will issue notices to all land/building owners to register their tax-IDs on the record of the land/building they own. The LRO will freeze the sale of plots/buildings whose owners have NOT registered their tax-IDs. For each sale, the LRO will note the tax-IDs of buyers/sellers and funds exchanged, and report the CGTC tax-IDs, funds exchanged and previous purchase price that was registered at the time of previous sale, along with current market price in the "near by" area as defined by LRO. The Jurors may fine a property-owner to upto 10% of the value if the owner has NOT registered his tax-ID within 12 months after LRO has issued the notice.
5.3 [Person responsible for this procedure/directive: CGTC] All the following entities : electricity company, cable company, municipalities and housing societies MUST accept periodic payments ONLY by checks, and NOT by cash. The periodic payments will include payments which are to be paid every month or every 2-3 months. In additon, bank can issue draft ONLY against a check, and NOT by cash. In addition, the CGTC may prepare a list types of payments that must be made by checks only, and NOT by cash. The CGTC will place additions/deletions in the list before Juries of all districts of India, and if over 8 out of 12 Jurors in over 50% Juries approve the addition/deletion, the CTGC will act as per the list.
5.4 [Person responsible for this procedure/directive: CGTC] If a person/company has obtained rent by any means except payee-ID checks, the CGTC will NOT allow him to take any deduction on the rent income, and entire income will be taxable.
5.5 [Person responsible for this procedure/directive: CGTC] For any income in which a lower tax rate applies, or if there is a lumpsum deduction applicable without detailed specification of the expenses, the income must be obtained by checks only, or the lower tax rate and/or lumpsum deduction will NOT be applicable. The CTGC will publish the enumerated list of types of income which must be accepted by checks. The list will apply on tax-payer ONLY after over 50% of Juries from all districts of India have approved the items in the list.

Section   6   : Regulating cash transactions
6.1 [Person responsible for this procedure/directive: CGTC] Within 1 year after passing the law, the CGTC will create an electronic account for every person with tax-ID, and will activate after assigning a password after the person approaches and asks for a password.
6.2 [Person responsible for this procedure/directive: CGTC] Within 2 years after passing of this law, any person who has given a paper reciept acknoledging a CASH payment he has recieved MUST obsevre following conditions :
  1. The reciept must tax-ID of the payment reciever
  2. The reciept must have a date and a unique serial number
  3. The payment reciever must register the date, the serial number and amount he recieved in his electronic account within 15 days of reciept of the amount.
  4. In addition, if the cash giver has specified his tax-ID, and demanded that his tax-ID too must be entered, the payment reciever must also enter payment giver's tax-ID. If payment-giver's ID is entered, CGTC should ensure that payment-giver can see the entry using CTGC's web-sites.
6.3 [Person responsible for this procedure/directive: CGTC] If a tax-payer is claiming an expense paid by payee-ID check, and if CGTC or his agent believes that no such payment was made, they may inquire with the bank which issued the check and bank where the check was deposited. If the banks confirm the payments, the CGTC CANNOT challange the payment, though he may question if the expense was really needed for business.
6.4 [Person responsible for this procedure/directive: CGTC] If a tax-payer is claiming an expense paid by cash as a deduction against his income, CGTC will allow the deduction ONLY if the tax-ID of the cash reciever is specified, along with serial number and date, and a matching entry exists in the electronic account of the payment reciever. If a matching entry does NOT exist in the account of payment reciever, the CTGC will NOT allow payment-giver the deduction. The payment-giver may collect the tax he had to pay by a civil suit.
6.5 [Person responsible for this procedure/directive: Banks' Branch Managers, CGTC] The branch managers provide the sum totals of cash withdrawals and deposits of EVERY account with its tax-ID to the CGTC between Jan-1 and Dec-31. For each tax-ID, the CGTC will find the sum of total cash withdrawal and deposits he had made in the year. If the account-holder is non-person like company or HUF, the CGTC will charge 0.2% of the total as cash-handling tax. For individuals, it will be 0.1% of amount above Rs 200,000/-.

Section   7   : Other Details
7.1 The rupee amount used in this text uses July-2000 price levels. The standing committee can adjust the amounts every six months using RBIís Inflation Index.
7.2 If the officer does not execute a procedure or ignores an instruction stated in this Resolution/Act, a citizen can file a complaint before the Grand Jurors. In case there are is no Grand Jury, the citizens can appeal to the CM to setup a Grand Jury. But under this law, a citizen cannot complaint before CM, Corporators, CM, MLAs, PM, or MPs.
7.3 The Jurors will judge this Act, guidelines, intentions as well as the facts related to the case


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DRAFT-3 : Procedure to Fix the Central Govt's Tax Acts

 
Section   1   :   Preamble
  This Act is to create a procedure to fix the Central Govt Tax System, including Income Tax Act, and ensure that it does NOT degenerate in future. The MPs may amend the tax codes as and when applicable. This Act to create a procedeure for citizens to amend the tax codes WITHOUT the assistance of MPs.

Section   2   : Changing the tax code
2.1 [Person responsible for this procedure/directive: CGTC i.e. Central Govt Tax Collector] Any person can propose a change in Income Tax Act, or any Act or Govt rule that involes collection of Income Tax, or Wealth Tax or Excise Tax or Custom Tax or any tax by the Central Govt, but no other Act/rule, to the CGTC, after submitting a fee of Rs 500,000/-. The CGTC will select 10 Districts of India at random, and send them the proposed change to the District Jury Administrators, pay Rs 40,000 to each and request them to summon a Jury of 12 citizens, and reuqest them to provide the feedback on the proposal.
2.2 The proposer may personally or via agent appear before the Jurors and present the proposal. The CGTC may send an officer to comment on the proposal. The proposer and CGTC's officer will comment on the proposal for 1 hour each alternatively for 3 hours each a day for 3 days. If over 8 of 12 Jurors in over 5 out of 10 District Juries declare that proposal should be presented to ALL districts, the CGTC will forward the proposal for Jury's Review to ALL Jury Administrators or else he will cancel the proposal. If over 8 out of 12 Jurors in over 5 out of 10 District Juries request the CGTC to refund the fee to the proposer, and pay him expenses, the CGTC will refund the deposit and pay the proposer Rs 200,000/-.
2.3 If over 8 out 12 Jurors in over 50% of Districts approve the proposal, the CGTC will declare the proposal as the law. The citizens may later amend the law using this Act, or using Direct Vote or MPs may amend the law as per the prevailing law.

Section   3   : Other Details
3.1 If the officer does not execute a procedure or ignores an instruction stated in this Resolution/Act, a citizen can file a complaint before the Grand Jurors. In case there are is no Grand Jury, the citizens can appeal to the PM to setup a Grand Jury. But under this law, a citizen cannot complaint before PM, Corporators, PM, MLAs, PM, or MPs.
3.2 The Jurors will judge this Act, guidelines, intentions as well as the facts related to the case


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DRAFT-4 : Improving tax collection


Section   1   : Tax exemption on income from agriculture

All persons' income from agriculture will exempt from income tax except following persons :
  1. non-individual entities such as HUF, companies etc
  2. Govt employees : employees of State Govt, Central Govt (except Military), Municipalities, Judges, MPs, MLAs, Members of Municipal Councils (NOT District or Other Panchayats), Ministers
  3. Employee of a PSU, school, college, universtity of ANY institute that is partially or wholly funded by Govt
  4. Any individual who is director of any private or public limited company
The entities in above categories cannot take income from agriculture as tax exempt, and their agricultiural incomes will be added with the other income.


-----------------(end of DRAFT-4) -----------------