The proposal to move from EEE to EET is not a great idea at this time where the economy is growing at 8% levels. Tax collections this year are soaring high and there is no need to tax salaried individuals more, rather look for a way to bring in the money to govt kitty from SME entrepreneurs who pay much much lesser or no tax at all. The reasons for not having to move to EEE are: 1. Extra taxing as EEE will finally collect the tax at the later stages. 2. Now-a-days, jobs are also becoming more and more insecure in high growth areas like IT and ITES and other related industries(Real Estate, for example is in the verge of a burst). Hence a hedge is required and the money saved will help in distress period, if taxed at withdrawal, it will be a sure shot burden. 3. People can move to stocks and Diversified Equity MFs, which in long run gives much better returns.( 1 lac exempt now saves, say 30000 in taxes, and at 10% in ELSS, say, in 20 years, and 70000 at 15-20% in Stocks or other MFs, in the same 20 years will deliver much higher returns and long terms cap gains are not taxable) This will reduce the intent to do tax planning savings. 4. Last, let the person live in the present, saving for a looooong term, what if the person die, let him enjoy life as it comes, having shorter lock-ins help him to spend in the medium run, where he will be paying indirect taxes to the govt.
