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SELFTax Accounts
What is this?
Every person who is educated and in employment or business should be having a bank account. Other than Savings and Current account, there are different kinds of Deposit Accounts Fixed and Re-investment plans. Recurring Deposit account is very useful to build a bulk amount to meet certain periodical payments like Property Tax, Insurance Premiums etc. These are mainly for future savings and to build a reasonable liquid wealth.
Every person need to pay the Government taxes some time or other. As a self discipline, one can open a separate savings account as a SELFTax to transfer a small percentage of every inflow of funds. It could be say 1% to 5% to this account. The main feature is this account cannot be used for other purposes and restricted mainly for tax payments of any kind. Additional interest earned will be helpful in increasing the reserve funds. In addition to TDS, they will provide a comfortable funds position during Advance Tax or Self Assessment remittances.
This will be a unique type of account as it is not a deposit account or an expenditure account but only for building up funds to meet the tax obligations. The legal heirs may also split this account for using only towards their tax obligations.
Government may come forward to facilitate this new type of Saving account and fix a better interest rate which is to be exempted from tax. This will be an incentive and create an atmosphere for setting the mind set of the tax payers to fulfill their obligations with easier compliance. This may be also a kind of insurance to meet their tax payments when affected by external financial constraints during the time of tax dues. Insurance companies may pay for other losses but not for meeting tax payments.
Parents may open this kind of accounts for their wards. The built up balance in the account may be an incentive for the next generation to use it for tax payments. To use that they need to have a taxable income and for that they need to generate sufficient income. May be father telling his son, ‘Hi Son, work hard and earn well. The SELFTax account will take care of your taxes’. Another way of motivation for earning and tax compliance, as the funds can only be used for tax payments, helping them for being a Responsible Citizen.
