The committee of experts, headed by R Kannan of SBI [Get Quote] Life Insurance, will spell out ways of bringing in uniformity in tax treatment on all savings schemes as per the 'EET' model, which envisages tax only at withdrawal stage and exemptions at contribution and accumulation stages.

"We have been given the mandate to draw the roadmap to move towards a 'EET' system. We will submit the report by October end," Kannan said.

"We are looking at 90 short term and all long term saving instruments including provident funds. We have to see which instrument comes directly under 'EET' and which do not. Whether it is possible and feasible to bring it under 'EET' within 4 to 5 years," he said.

At present, some of the savings schemes like EPF is completely exempted while some others like long term bonds are taxed during the withdrawal stage.

The panel has segregated taxpayers in 3 categories -- first, individuals saving more than Rs 1 lakh annually; second, taxpayers saving less than Rs 1 lakh; and third, persons who are out of tax net but have little savings.

In case of the first category, the panel is looking into whether the 'EET' model leads to double taxation. "We want to ensure that nobody is burdened with taxes," Kannan said. The panel would also look into the administrative issues and how the new tax system could be implemented.

The finance ministry is in favour of a "level playing field" for all savings instruments. The government has already announced that 'EEE' model for some savings instruments will be replaced by 'EET' system, Arvind Modi, joint secretary in the revenue department of finance ministry, said.

"Savings is unfairly treated. If there is one tax treatment for one savings instrument, it should be same for others also," he said.

Before the 2005 budget, he said the country had 'EET' treatment for some savings instrument and 'EEE' for others. This differential treatment was diverting savings to one particular product.

He said the scope of tax laws applies only to the organised sector. "We have to find ways and means to encourage the unorganised sector to come under the tax system," he said.

The new pension system, he said, will come under the 'EET' system of taxation.