p. 1

all economic ills ­ one pill top tax system the bank account redefining the role of banking sector abstract this paper called top tax system redefines the role of banking sector to pave the way for future economic system that benefits 7 billion people of the world in all spheres of their lives in one form or the other banking sector will become virtually the intermediaries between the people and the government for all tax collections and redistribution of funds/revenues from the government to people who should be the natural eligible and legitimate recipients while eliminating whales parasites and limpets by vijay krushna varma the bank account in top tax system will be called as main savings account in the present economic system a person s or a company s money movable or immovable propertieslike vehicles plots flats houses factories commercial establishments lands etc shares family tree insurance policies and all other assets are recorded managed and handled by different departments agencies or institutions but in the suggested top tax system each individual above the age of 15 years will have one main savings account consisting of five folders money movable or immovable properties like vehicles plots flats houses commercial establishments lands etc shares family tree insurance policies etc are recorded managed and handled in a single account called main savings account msa with five folders in case of individuals and in corporate account numbers can with seven folders in case of companies which issued shares for public these accounts namely msas ssas and cans will be maintained and operated by banks replacing please visit http www.taxationreforms.com page 1

[close]

p. 2

all economic ills ­ one pill top tax system different departments tax collection and tax enforcement boards agencies or institutions of the present economic system thus people s money shares all movable and immovable properties will be in only one account msa with different folders operated by banks 1 usage of main savings account msa there will be only one compulsory and mandatory msa for each person given by the government this msa will have five folders for each specific purpose of an individual the first folder liquid money folder will be used for storage and usage of money in top tax system it is called as liquid money generated through savings/earnings/incomes/donations this folder of msa can also be used to run or operate any business or industry owned wholly by an individual the second folder immovable property folder/land savings account/lca shall be used for registration storage and usage of ownership rights of all immovable properties like lands flats plots commercial establishments and etcetera the ownership rights of these assets will be transferred from one person s lsa to another person s lsa while purchasing/selling/donating of these immovable properties vivid explanation land savings account/lca in this suggested top tax system the immovable property folder of each person shall be utilised as the de-mat account of that person s ownership rights of immovable properties like lands plots flats factories and other establishments while purchasing or selling the transfer of ownership rights of these assets/properties from one person to another person shall be made from one person s lsa to another person s lsa through banks/service centres in an electronic/digital form so the transfer of assets like lands plots flats structures and other establishments will take place in physical form upon the transfer of ownership right of that asset in digital form from one lsa seller to another lsa buyer top tax system suggests that total land record of the country should be dematerialised according to extent location mapping and ownership the land belongs to people will be recorded in their respective lsas similarly the land that belongs to government government organisations companies should be recorded in their respective accounts the repeat under the top tax system the purchase of lands plots flats or other properties should be made through land savings account lca the second folder of main savings account msa operated by banks if any person buys land plot flat or any other property anywhere in india the extent and nature of the property will be credited in his land savings account and the same property will be debited from the seller land savings account lsa whenever he/she sells any property that is credited in his lsa the same will be debited from his/her land savings account and the same property will be credited in the buyer s land savings account lsa the credit in the lsa means purchase of immovable property and debit means selling of immovable property the immovable properties will be in dematerialised form and the ownership rights can be transferred from one account to another account just like money transfers and shares just like shares there will be no paper documents for properties unlike cash transfers the buyer s presence and signature/authentication shall also be needed for any movable or immovable property transaction a bank statement of the second folder lsa of any person s main savings account will hold the entire ownership rights of that person s all immovable properties the people can get these bank statements of their properties at any time at banks in addition to please visit http www.taxationreforms.com page 2

[close]

p. 3

all economic ills ­ one pill top tax system weekly monthly or yearly statements by post or e-mails or both they will get phone messages and email statements immediately after each property transfer there will be no multiple selling of the same property to different people and unauthorised selling/purchase and illegal occupation of other person s property without his/her knowing/consent will not be possible advantages of land savings account 1 land ceiling act in the present system rich people are having huge tracts of agriculture lands in different districts and states making mockery of the land ceiling act the registrations of lands flats plots and other properties are being made by the registration departments and land records are maintained by revenue departments in the top tax system land ceiling act can be strictly enforced on individuals and no individual can have more than 20 acres of land in the entire country every individual will have only one main savings account consisting of separate folder called land savings account for all immovable properties like lands plots flats etc all immovable properties situated wherever in the country along with all details of survey numbers boundaries description nature map geo location village district state extent and date of selling/buying of each property of each person will be recorded and maintained in land savings account lca the land savings account will be operated and maintained by banks just like money savings accounts debits and credits of all properties will be made in the land savings account while a person buys or sells his property the total extent of land recorded in all land savings accounts belonging to people governments departments organisations companies institutions etc will remain exactly the same even after countless number of debits and credits each day the land savings account will show an individual s exact ownership rights of his/her all immovable properties the total land extent in each land savings account will never cross the upper limit of 20 acres as envisaged in top tax system strictly adhering to land ceiling act there can be absolutely no multiple selling of same property to different people it will become impossible for any individual to own huge extent of lands beyond land ceiling act under different names in different locations of the country top tax system ensures that the land ceiling act can be implemented in totality to perfection making government s task easier in pushing forward land reforms and allocating land to landless poor there will be no paper documents for all movable and immovable properties hence no separate registration and revenues departments are needed in the suggested top tax system only land survey department would suffice to mark and clear boundary disputes 2 farm subsidies in present system 90 of total farm subsidies are being gobbled up by rich farmers 10 while the small and marginal farmers 90 are getting only 10 of total farm subsidies this anomaly can be totally checked in top tax system where land savings account is a sub-folder of main savings account operated by banks according to records in land savings accounts the total farm subsidies 100 would reach the small and marginal farmers while keeping away rich farmers from all subsidies here rich farmers means industrialists contractors professionals celebrities individuals politicians business class salaried class govt or private etc whose annual incomes are more than 2,00 000 other than agriculture income please visit http www.taxationreforms.com page 3

[close]

p. 4

all economic ills ­ one pill top tax system 3 farm loans in the present system getting farm loans by farmers is cumbersome laborious time consuming and bribery ridden exercise farmers need to go from one department to another department to get land documents evaluation and encumbrance certificates revenue certificates etc after paying heavy bribes farmers are being forced to take loans from private lenders who charge high interest rates but land savings account will make money borrowing by farmers from banks so much easy instant smooth timely and time saving exercise by using land savings accounts the branch managers can sanction farm loans instantly based on land records in the lcas 4 interest rates on farm loans in the suggested top tax system the interest rates on farm loans up to rs.10 000 00 will be only 2 per annum and 4 per annum beyond rs 10,000,00 5 land acquisition and compensation if an individual or company acquires land of more than 20 acres of land for industry studios real estate or any other purpose land tax of 10,000 per acre per annum needs to be levied if land is acquired for sezs the farmers should be paid not only the market price of the land but also rs 1,000 per acre per month for rest of his/her life and thereafter to his/her legal heir it is easier for local panchayats municipalities corporation to collect house tax vacant plot/land tax and properties tax as all the details of a person s properties are recorded in his/her land savings account lsa 6 land transfer/registration/stamp duty under the top tax system there will be no stamp duties on all immovable properties the registration charges for purchasing any property i.e land plot flat house or other commercial establishments will be same and equal all over india irrespective of the place and market value of property the registration charges would be only rs 1,000 per acre rs 1,000 per 300 square yards of plot or rs 1,000 per 1000 square feet of flat and multiples thereof these registrations of land transfers can be made in any bank and anywhere in india it is needless that the loss of stamp duties would be compensated by the top tax which is compulsory on any money transfers if a person buys a property land plot flat house commercial establishment for rs 10 lakhs a top tax of rs 40,000 will be deducted from his msa or ssa while transferring the cash to the sellers account if he/she buys the same property for rs 1 crore the deducted top tax will be rs 4 lakhs in the case a person transfers a property as a gift to his/her son/daughter or any other person trust or organisation the top tax deducted will be nil as there is no cash transfer made that means there will be no need for separate registration and revenue departments for registrations and handling of all immovable properties the third folder movable property folder shall be utilised for ownership rights of all movable properties like vehicles gold jewellery and etcetera the ownership rights of these properties will be transferred from one person s msa manufacturer dealer and seller to another person s msa while purchase/sale/donation of these movable properties the ownership records will contain the vehicle s model manufacturing date engine number chassis number registration number fitness certificate etc the ownership rights of all vehicles will be transferred from one msa belonging to manufacturer/importer/dealer/retailer or other citizen to the buyer s account through online just like money transfers in the present system in the top tax system people will not need to have separate vehicle registration certificates fitness certificates and insurance certificates for each vehicle he/she owns the bank statement of the third folder of his/her msa which contains the owning record of all his/her vehicles will suffice for all his/her vehicles that means the bank statement of the third folder please visit http www.taxationreforms.com page 4

[close]

p. 5

all economic ills ­ one pill top tax system lsa of any person s main savings account will hold the entire ownership rights of that person s all movable properties furthermore there will be no need to have separate rto departments for registration and checking of vehicles in the top tax system the traffic police department will suffice to oversee all vehicles in promptly paying the road taxes and insurance premiums regularly the data on payment of road taxes collected from banks will ensure that the checking authorities can stop only the non tax paying vehicles leaving the tax paid vehicles unstopped on the highways similarly the gold in the entire country owned by people importers dealers sellers governments temples companies organisations will be recorded in the third foldermovable property folder of each main savings account upon the launching of top tax system people should register the gold they own in their third folder of their main savings account within the stipulated time period of one month or more or as decided by the government after this stipulated time period no individual will be allowed to register his/her gold from hereafter when one person buys gold the ownership rights of the seller importer/dealer/retailer or other citizen will be transferred from his/her msa to the buyer s account through online just like money transfers in the present system so the ownership rights of gold will be transferred from one main savings account to another account importer dealer seller or between people on each purchase or selling of gold gold loans will be given on the records of an individual s gold owning in his/her main savings account third folder and gold s physical mortgage it will not be possible either to mortgage or sell gold without owning record in his her msa that means there will be no possibility of stealing gold because the thief cannot sell the stolen gold without the owning record in his/her account a person cannot complain the theft of his/her gold more than the recorded gold in his/her account similarly when law enforcement agencies raid a person s house and find gold beyond the recorded gold in his/her account it will be deemed as either stolen or bought from illegal means people who bring gold from abroad on return should record it in their main savings account at the airport itself the exact gold reserve owned either by people or governments will be known at any time every year the imported and locally produced gold will be added to these reserves the fourth folder shares/stocks folder shall be utilised for storage and usage of ownership rights of shares/stocks bonds derivatives etc the ownership rights of these securities will be transferred from one person s msa to another person s msa while buying/selling/donation the shares will have only ownership rights and called as semi solid money the fifth folder family folder shall be utilised for family details and called as family folder marriage registration and child birth registrations will be made both in husband and wife s family folders of msas based on the details in the family folders monthly rations will be computed and transferred every month in the form of cash directly into the wife s msas every child will get his/her own msa account at the age of 15 years the bank statement of the fifth folder family folder of msa of any individual can be utilised as caste and income certificate voter list ration card and passport it can be obtained within minutes from any bank and from anywhere in the country people need not pay bribes to get these certificates or documents from revenue department and passport offices all funds allocated towards welfare of scs sts and bcs can be transferred directly into the msas of these sections leaving no room for leakages bribes and misappropriation of these funds vivid explanation all the details of a person s occupation educational qualifications marriage driving license passport his/her life partners name pan number msa and vice versa children and their age etc will be recorded in the fifth folderfamily folder of his/her please visit http www.taxationreforms.com page 5

[close]

p. 6

all economic ills ­ one pill top tax system main savings account the parents should register their child s details in the data record of their main savings account msa within three months of their child s birth once the child gets the age of 15 years he/she will automatically get pan and msa the total care and welfare of the orphans should be taken by the state governments till the child reaches the age of 20 years the pathetic plight of street children and orphans will come to an end once the top tax system becomes operational this system totally and permanently checks the ever increasing problem of illegal migration from pakistan and bangladesh changing the demographic proportion of india to an unimaginable level once all the citizens above the age of 15 years are given the mandatory main savings account msa and the top tax system becomes fully operational no adult will be given main savings account msa thereafter from hereafter every additional main savings account msa will be an offshoot of an existing msa belonging to parents there will be no question of additional fresh msa without parent s existing msa similarly existing msas will come to cease upon the death of individuals all the money shares movable and immovable properties recorded in the five folders of msa of the deceased person will be transferred to his/her legal heirs the total number of msas will increase every year depending upon the growth rate of population of that country top tax system will record maintain every individual s family record generation after generation therefore illegal migrants from other countries cannot enter illegally into india get main savings account or sub savings accounts and assimilate in indian population it will be a lot easier for the government to detect terrorists and militants who cross over from across the border to indulge in unlawful activities preparation of voter lists top tax system makes the preparation of electoral roles to be very easy and simple and instant fresh voter lists will be provided by banks at any time if asked by election commission according to the addresses recorded in the main savings account the area wise voter lists can be supplied by banks to conduct polls to panchayats cities districts mla mp and all other polls if by polls are to be held the last voter lists should be used in that particular constituency in order to stop people from other areas to change their addresses to that by poll areas top tax system will be operated solely by banks to provide different services for the government like taxation tax collection tax enforcement for issuing caste certificates income certificates voter lists monthly rations subsidies pensions calamity relief funds passports licences fees reimbursements scholarships etc at absolutely free of cost top tax system operated by banks will also help people in getting all the above mentioned services at single window through their msas with five different folders that means top tax system will replace present system s multiple departments like income tax department central excise department cbdt cbec tax tribunals passport department census department states commercial tax departments civil supplies departments registration departments revenue departments etc saving thousands of crores of government s nonplan expenditure 2 usage of sub savings account ssa every person can open and operate as much number of ssas as he/she wishes the ssa will have only one folder called as liquid money folder this folder shall be used for receiving storage and usage of money to operate any business or industry wholly owned by an individual 3 usage of corporate account number can please visit http www.taxationreforms.com page 6

[close]

p. 7

all economic ills ­ one pill top tax system corporate companies mncs and public limited companies which sold/issued shares to the public will be given cans each corporate account number will have seven folders for each specific operating/running purpose of the company the first folder shall be utilised for receiving storage and usage of money for running of that company the second folder shall be utilised for having all records of immovable properties like land buildings infrastructure and etcetera of that project/plant/business the third folder shall be used for registration storage and usage of ownership rights for all fleet of vehicles and other movable properties like machinery etcetera required for running of that company the fourth folder shall be used for storage of all shares of the promoters and the public of that company the fifth folder will contain the details and accounts of all the employed manpower of that company the sixth folder will contain the detailed accounts of all raw materials and other required inputs bought and used for running of that company the seventh folder will contain the details and accounts of all products manufactured sales and inventory top tax system s can with seven folders is a new procedure to see that company s financial books were clean accurate open and transparent to all share holders so that there can be no room for fraudulent and deceptive financial statements vivid explanation the top tax system s corporate account numbers cans with seven folders will make all companies accounts fully transparent and open to all share holders every day unlike quarterly half-year and yearly statements released by the companies in the present system for inspection study and analysis before investing their hard earned money in shares of those companies with sound financial position money will flow into the first folder of corporate account number can when products are sold and money will go out when payments are made towards salaries purchase of raw materials services equipment etc the seventh folder which records the manufactured products gets updated online at every stage of production and marketing just like money savings account the depletion of stock in the seventh folder products folder means the increase of money in the money folder first folder on the selling of products similarly the decrease of raw materials in the sixth folder means an increase of finished products in the seventh folder the increase of raw materials in the sixth folder points to depletion of money in the money folder first folder on purchase of raw materials all these seven folders get updated online at every stage of construction production and marketing showing the exact details of debits and credits relating to money raw materials finished products borrowings shares etc for the benefit of all investors who put their hard earned money into these companies the total money the value of raw materials finished products machinery movable and immovable properties recorded in the seven folders of any corporate account number can minus the borrowings is equal to the total strength of that company the top tax system s transparent accounting system in corporate account number can with seven separate folders for money movable property immovable property manpower shares raw materials and other inputs and manufactured products and inventory will remove all frauds in accounting securities stocks and investment these cans with seven folders ensure that there will be no chance of fraudulent business practices of overstating profits concealing debts spreading the expenses out over several years under voicing or over voicing of raw please visit http www.taxationreforms.com page 7

[close]

p. 8

all economic ills ­ one pill top tax system materials inputs and manufactured products under or over stating of stocks padding up of project cost and diverting of funds at grounding construction erection and all stages of project implementation and publication of falsified financial reports the cans of top tax system can also check the diversion of funds from one company to another company within the group companies same promoters the top tax system gives a big boost to stock markets as people start buying huge lots of shares to maintain minimum balance in their accounts in order to avoid profit tax there will be no significant effect of top tax system on intraday trading and future options trading because the looser looses extra 4 of the loss amount only in the intraday trading people will prefer to buy shares on the long term and annual yield basis they invest in the companies which give handsome dividends year after year thus a country s exact worth of all its money movable and immovable properties shares gold ores and minerals will be known exactly at any given point of time top tax system insists that the entire natural resources of any country should belong to people of that country the total known reserves of all natural resources should be recorded dematerialise form in government accounts the government should sell ores or minerals to mining companies at reasonable price in terms of quantity or tonnes instead of leasing out mines in terms of extent or acres every tonne of ore or mineral mined should be paid by mining companies the mining company which offers the highest price per tonne should be given the licence to mine after paying advance payment for the quantity it wants to mine all the mining companies should buy ore or minerals from governments before start of mining the bought ore or mineral will be in dematerialised form and transferred from government account to mining companies can every tonne of mined ore or mineral will be accounted and transferred from one account to another account i.e from miner s account to user s or exporter s account the quantity of ores or mineral recorded in the corporate account numbers can gets depleted when used in the production process or when exported the stocks get increased when bought from mining companies or governments when a mining company sells or exports the mined ore or mineral to any other company the transfer of rights of bought ore or mineral will be made online from the mining company s can sixth folder to the buyer s can at the same time money will be transferred from buying company s can to mining company s can after the depletion of the recorded bought stocks in the can the mining company will have to buy fresh stocks from the governments and replenish its sixth folder that means the buying and selling of natural resources will be made both in physical form and dematerialised form top tax system makes it impossible for any mining company to illegally mine huge amounts of ore or minerals without paying correct price top tax system makes it possible to know the exact quantity of ores or minerals mined exported or used by domestic companies this article explains how banks will manage people s money movable and immovable properties shares and loans by using main savings account read full article i am suggesting new methods models and innovative and alternative policies in the areas of monetary system budget preparation banking finance system public finance optimal taxation tax collection tax compliance subsidies money supply and fiscal policy to help remove corruption tax evasion economic recession black money fake currency ransoms robberies and societal inequalities in my opinion the proposed new economic system may usher in good governance 100 tax compliance and corruption free environment it suggests a single tax called top tax transfer or purchase tax for both centre and states combined in place of present multiple indirect taxes with please visit http www.taxationreforms.com page 8

[close]

p. 9

all economic ills ­ one pill top tax system different slab rates on different goods/commodities/services and multiple direct taxes with different slab rates to relieve 7 billion people of the world from the cobweb of ambiguous and complex tax structures plethora of tax laws mandatory and cumbersome accounting auditing tax returns and consequent quagmire of all tax related cases taxation tax collection tax enforcement tax compliance allocation of revenues to various ministries or departments and money supply into the economy are unified and integrated in the banking system citizens need not maintain separate account books and submit tax returns annually for paying either direct taxes on personal incomes or indirect taxes while running business or industry this new economic system involving a new tax system without multiple taxes tax laws tax collection departments tax tribunals and tax enforcement agencies envisages 20 to 30 more revenues than presently accruing from multiple taxes collected by different tax collection departments/agencies the availability of resources and capital flows needed for economic recovery is the self-priming character of the top tax system without government s fiscal stimulus packages this new economic system shall be operated by banks at minimum operating cost with limited paper currency 0.3 and dematerialised money 99.7 of the total money available in the economy in the particular country thereby totally eliminating black money tax evasion fake currency corruption and extortions under this new taxation system the tax net cast by banks will be the broadest with absolutely no tax evasion making it possible for the lowest tax slab rate and the cheapest prices of commodities/services the redistribution of revenues from government to people in the form of welfare schemes subsidies and various relief funds will become easier without leakages bribes and misappropriation although this new taxation system is a basic model suggested mainly for india the basic concept of taxation tax collection and tax compliance methods can be adopted and implemented by all the developed and developing countries alike to benefit 6.9 billion people of the world in all spheres of their lives in one form or the other this article contains eight parts 1 tax structure and direct benefits of the top tax system 2 method of implementation of top tax system 3 limited paper currency 4 money supply and monetary policy 5 operating cost of the top tax system 6 comparative study of tax revenues between present system and the proposed top tax system 7 advantages of top tax system 8 summary of top tax system please visit http www.taxationreforms.com page 9

[close]

p. 10

all economic ills ­ one pill top tax system 1 tax structure and direct benefits of the suggested top tax system tax structure of suggested top tax system present system direct/indirect taxescentre and states 1.income tax 2.corporation tax 3.capital gains tax 4.wealth tax 5.securities transaction tax 6.central excise duty 7.customs duty 8.service tax 9.sales tax/vat by states 10.stamp duty 11.land revenue 12.professional tax 13.state excise 14.octroi 15.surcharges and other cess 16 property tax 17 gift tax 18 cst suggested top tax system suggested slab rate 1 5+6+8+9+10+12+14+15+17+18 transfer or purchase tax top tax for states and centre combined slab rate 4 1+3+4 profit tax totally avoidable for states and centre combined slab rate=30 4 2 30 3 corporation optional slab rate=20 tax by centre 20 4 customs duty by centre optional slab rate nil excess land tax states and centre combined optional state excise by states nil 5 6 there will be only one mandatory tax called top tax with single slab rate4 for both centre and states combined in the proposed top tax system the profit tax in place of present income tax and capital gains tax will be account basic and totally avoidable unlike individual basic and compulsory in the present system for clear understanding please see table number 1 and 2 in page number 6 and 7 profit tax means it will be imposed on person s incomes if remained any earned/got through salary remuneration business industry donations and gifts after liberally used on expenditure/spending various investments gifts and donations in the present system personal income tax is levied on incomes earned/got through salary remuneration business gifts donations and sale proceeds however with some exemptions before used on expenditure/spending donations and various investments under proposed please visit http www.taxationreforms.com page 10

[close]

p. 11

all economic ills ­ one pill top tax system top tax system the corporation tax and custom duty/import duty can be levied by the central government as usual to save small scale and domestic industries respectively similarly the excise duty on liquor and wines can be levied by the state governments as under the present system to inhibit heavy consumption and addiction direct benefits of the suggested top tax system under proposed top tax system there will be no income tax and other direct taxes benefits so under suggested top tax system people who have taxable incomes got from salary remuneration/professional income/donation/gift/service/business/industry will benefit as they need not pay income tax/other direct taxes and submit income tax returns annually 7 billion people of the world will be unshackled from all direct taxes tax laws tax raids tax returns accounting and auditing under suggested top tax system there will be no sales tax vat central excise duty cenvat service tax and all other indirect taxes benefits:1 markets will be fully open without any hurdles like multiple taxes permits licenses way bills accounting auditing tax returns and tax laws traders manufacturers transporters dealers retailers vendors contractors service providers and all others will not need to maintain account books sales lists stock lists way bills etc no accounting auditing and tax returns will be required for individuals who run business or industry the present day trade barriers between manufacturers and consumers between the states within the country and between the nations can be totally removed 2 therefore all the check posts within a top tax system implemented country can be totally removed allowing free movement of industrial goods/commodities and agriculture produce from anywhere to anywhere in that country and benefitting all farmers manufacturers traders and more importantly the consumers 3 the entire truck owners will benefit as they need not pay bribes at check posts they need not carry way bills while transporting industrial goods and agriculture produce from one place to another place in that top tax system implemented country 4 the entire farming community will benefit as they can transport their agriculture produce from anywhere to anywhere and sell their produce at market prices 5 there will be no tax collection expenditure for the governments and no tax compliance costs for the people yet the tax revenues from single tax top tax will be 30 to 40 more than the total revenues presently accruing from all direct and indirect taxes collected by multiple tax collection departments at huge expenditure for both states and centre combined 6 the tax component on any commodity product or service will be less than 11 while the average tax component is more than 35 in the present tax system 7 there will be absolutely no scope for tax evasion and it s by products namely black money and corruption please visit http www.taxationreforms.com page 11

[close]

p. 12

all economic ills ­ one pill top tax system 2 method of implementation of top tax system basic model india what is required for top tax system to be successfully implemented is the strong political will to build the basic infrastructure of providing banking service for every village/suburb/town or colony having a population of around 2000 with the help of private sector banks and institutions the central government should give a permanent account number pan by using biometric method and iris identification to every citizen above the age of 15 years and make mandatory for every citizen to have only one main savings account msa with the same pan in the bank/service centre situated at the village or colony where he lives in the pan and msa number should be one and same every citizen would be allowed to open any number of sub savings accounts ssa as he/she wishes to operate business or industry in as many banks by using msa number under proposed top tax system the accounting and auditing of the corporate or public companies will be mandatory and compulsory as in the present system for protecting the interests of the investors corporate or public companies will be given corporate account numbers can the main savings account msa should be used for buying of shares land for agriculture or industrial purpose plots flats gold jewellery vehicles commercial establishments or any other movable or immovable property the msa shall also be used to receive or pay salaries professional fees service fees remunerations donations loans etc main savings account is also needed to get driving licence passport voting right subsidies funds monthly ration pensions remittances and loans personal agriculture business educational and industrial and for getting compensation/exgratia/relief funds in the event of natural calamities like cyclones earthquakes floods famines accidents etc the sub savings accounts ssa and also the main savings accounts msa can be used for running business industry schools colleges hospitals hotels restaurants construction studios services or any other type of business just like msa the ssa can also be used to receive or pay salaries professional fees service fees remunerations donations loans etc the corporate or public companies will have to operate all cash transactions through the corporate account number can only after establishing sufficient number of banks/service centres by the government for example india with the help of private sector banks and financial institutions all the citizens should be asked to deposit all the currency notes of 1000 500 100 and 50 rupees except 20 10 5 2 rupee notes/coins available with them in these banks in their newly given main savings account msa or sub savings accounts ssa within a stipulated time of 30 days all presently run savings accounts and current accounts should be converted in to sub savings accounts ssas with the same account numbers and can be operated from the same banks similarly people who have money in the fixed deposits/fdrs will have to transfer all their money from these fixed deposits/fdrs to their respective newly given msas or newly opened/converted ssas within the same stipulated period of 30 days after this grace period of 30 days the government for example india needs to demonetise all notes of denomination 1000 500 100 and 50 rupee notes except 20 10 5 and 2 rupee notes from then on the top tax system becomes operational every person shall be allowed to withdraw cash up to maximum of rupees 5,000 per month from his/her earnings or savings available in his/her main savings account only thus a family of two can avail cash of 10,000 please visit http www.taxationreforms.com page 12

[close]

p. 13

all economic ills ­ one pill top tax system rupees maximum per month mainly to buy daily necessities like vegetables milk fruits edibles groceries and all other small or low valued items a person s maximum cash withdrawal of 5,000 per month from his/her main savings account msa through bank or atm will be in rs 20 rs 10 and rs 5 notes only a person can get some portion of his/her incomes/earnings transferred directly in to msas of his/her other non earning family members from source of his/her incomes/earnings so that his/her family can withdraw more cash currency per month every individual s incomes and savings will be in dematerialised form in his/her msa or ssas other than cash withdrawals of maximum rs 5,000 per month from his/her main savings account msa no person will be allowed to withdraw cash from his/her sub savings accounts ssa every time a person buys high valued items goods vehicles land plot flat gold jewellery vehicles or any other movable or immovable property avails physical or intellectual services or in case he/she lends donates money to others then he/she needs to transfer the required money from his/her sub savings account/main savings account through cheque debit card or net banking online cash transfers businessmen traders industrialists will have to make their cash transfers for all transactions through cheque debit card or net banking online cash transfer from their sub savings accounts/main savings account similarly a person s salary or remuneration or professional fee and all his/her incomes from business or industry will be credited to their sub savings accounts or main savings account through cheques debit card or net banking online cash transfers all three accounts namely can ssa and msa can be utilised to receive pay or store incomes/earnings/savings/donations/loans but cash can be withdrawn only from msa if available up to maximum rs 5000 per month per person the remaining available money dematerialised form from msa can be used or spent only through debit card cheque or online cash transfer for every transfer of amount a 4 transfer or purchase tax top tax of that amount will be automatically deducted from his/her msa/ssa account this 4 tax amount on every cash transaction through msa/ssa/can from all banks in a particular state will go to the combined account of state and centre in that particular state 30 of this amount from every state and centre combined account sacca will go to central government pool account the remaining 70 will be retained by the respective state governments this 4 transfer or purchase top tax can be reduced to 2 within 4 years from the adoption of this top tax system by reducing 0.50 basis points per year this will further reduce the prices of the commodities benefitting consumers all government accounts and banks will have to be exempted from this top tax vivid explanation this 4 transfer or purchase tax top tax on each cash transfer irrespective of the reason for such transfer purchase gift donation salary/remuneration or any other purpose operated through main savings accounts msa sub savings accounts ssa corporate account numbers can and operated by any bank or service centre will be automatically deducted from that account and transferred to state and centre s combined account sacca the top tax will be the same and uniform throughout the country on all cash transfers made through online/cheque/dd from all accounts towards purchase gift donation and salary/fee/remuneration so in the suggested top tax system the tax base will be the largest to have the minimum slab rate and the lowest tax component on each commodity/service people will get commodities/services at the lowest prices than in the present system furthermore the total revenues generated from top tax from all cash transfers from all accounts will be more than double than the combined revenues of all states and centre got from present multiple taxes with different slab rates with limited paper currency and dematerialised money in the top tax system every transaction will be please visit http www.taxationreforms.com page 13

[close]

p. 14

all economic ills ­ one pill top tax system transparent depicting the actual gdp of the country in literal sense every purchase gift donation and all types of payments will have to be carried through online cash transfers from one account to another account because of limited paper currency the total revenues got from top tax will be approximately equal to 3x4 12 of actual value of the gdp of that country in the manufacturer dealer retailer and consumer chain as goods commodities services donations physical and intellectual woks change hands in the manufacturer dealer retailer and consumer chain dematerialised money will be transferred from one account to another account correspondingly thus every cash transfer towards purchase gift donation salary/remuneration or any other purpose will be accounted and within the system eliminating underground/shadow/unreported/hidden transactions operated by physical currency got from black money and fake currency in the present economic system in the present system the parallel economy being run by black money and fake currency is obscuring the real gdp and hampering or lowering the collection of revenues the top tax system will eliminate the black money and fake currencies at one go and depict the exact gdp of the country the other salient feature of the top tax system is the better economic management and austerity the individuals who run business or industry will be relieved from ambiguous tax structures plethora of tax laws and mandatory sales lists stock lists accounting auditing and tax returns in addition to the transfer or purchase top tax a profit tax pt of 30 would be levied and automatically deducted once a year on the minimum amount recorded in the financial year of main savings account msa and each sub savings account ssa if any of every citizen the financial year of the msa of a person begins at the date the government allots him/her the msa the financial year of the sub savings account ssa will begin at the date a person chooses to open his/her ssa this profit tax pt is an account basic and it is totally irrelevant who owns that account msa/ssa the profit tax 30 of minimum balance amount recorded in the msa and each ssa if any of every person will be automatically deducted on the last day of the financial year of that msa and ssa if any of each person the profit tax in the next financial year of that particular msa/ssa will be levied on the minimum balance recorded of that year minus the previous year s taxed amount of that particular msa/ssa ignoring the maximum amount however huge may be thus the deducted profit tax 30 of minimum balance amount recorded in the msa and each ssa if any of every person in a particular state will be transferred to that state and centre s combined account sacca the combined taxes of top tax and profit tax collected in every state and centre s combined account sacca will have to be shared between that particular state and centre in the ratio of that particular state getting 70 and centre 30 hence the totally optional and avoidable profit tax will ensure that the money will be constantly pumped back into system keeping the economic growth at healthy rate in the present system the huge black money generated by hidden/shadow accounts combined with huge fake currency is playing havoc with our economy besides these two taxes namely top tax and profit tax which can be avoidable the central government shall impose the customs duty import duty and corporation tax as in the existing system except these four taxes the top tax system suggests removal of all other direct taxes indirect taxes and various surcharges levied in the present system the following two tables clearly illustrate how totally avoidable profit tax is deducted from ssa and msa of a person on minimum balance amounts recorded in each financial year excluding the previous or last taxed amount please visit http www.taxationreforms.com page 14

[close]

p. 15

all economic ills ­ one pill top tax system example1 it shows how the profit tax on minimum balance amounts recorded each year excluding the previous or last taxed amount will be deducted from each sub savings account ssa operated by a bank/service centre irrespective of the fact that who holds that account minimum maximum profit tax pt on the min net profit tax year balance of balance of amt ­ the last taxed amount ptdeducted the year the year 2007 08 10,000 50,00,000 30 of 10,000 3,000.00 2008 09 40,000 70,00,000 30 of 40,000-10,000 9,000.00 2009 10 90,000 1,80,00,000 30 of 90,000-40,000 15,000.00 2010 11 20,000 2,00,00,000 2011 12 1,50,000 5,00,000 30 of 1,50,000-90,000 18,000.00 2012 13 1,50,000 10,00,000 2013 14 2,00,000 80,00,000 30 of 2,00,000-1,50,000 15,000.00 2014 15 1,00,00,000 2,00,00,000 30 of 1,00,00,000-2,00,000 29,40,000.00 2015 16 80,00,000 3,00,00,000 example 2 it shows how the profit tax on minimum balance amounts recorded in each financial year excluding the previous or last taxed amount will be deducted from each main savings account msa operated by a bank/service centre irrespective of the fact that who holds that account minimum maximum profit tax pt on the min net profit tax balance of balance of the amt ­ the last taxed amount ptdeducted year the year year 2007 08 2,99,000 50,00,000 2008 09 3,00,000 70,00,000 30 of 3,00,000 90,000.00 2009 10 4,00,000 4,50,000 30 of 4,00,000-3,00,000 30,000.00 2010 11 2,00,000 8,00,000 2011 12 4,50,000 5,00,000 30 of 4,50,000-4,00,000 15,000.00 2012 13 4,50,000 10,00,000 2013 14 6,00,000 80,00,000 30 of 6,00,000-4,50,000 45,000.00 now it is clearly understood that the transfer or purchase top tax will be same on cash transfers in all three accounts namely main savings account msa sub savings account ssa and corporation account number can the profit tax is also same in main savings account and sub savings account except the minimum storage balance in main savings account msa the profit tax on minimum balance in main savings account will be levied from rs 3 lakhs onwards the profit tax on minimum balance in sub savings account starts from zero onwards in the case of corporation account number can the profit tax will have to be levied in the form of corporation tax as in the existing system please note that each person will have only one permanent and life time main savings account msa but can have as many sub savings account ssa as he/she can wish similarly the profit tax will be on account basic and totally avoidable instead of individual basic and compulsory as in the present economic system please also note that the profit tax on minimum balance recorded in each year in main savings account will be levied from rs 3 00,000 onwards in the present system the income tax accounting auditing and tax returns are compulsory so persons who have taxable incomes through salary or business or industry or please visit http www.taxationreforms.com page 15

[close]