The government may do a rejig in income tax slabs and a change in capital gains tax to boost revenues by over Rs 55,000 crore, according to news reports. “There could be an overall gain in revenues if the recommendations are implemented in full,” a report in The Economic Times said quoting sources.
The government is reviewing a report submitted by a task force on direct taxes and might implement some of the recommendations during the budget, the report said.
The report is yet to be made public, the news report said.
The Prime Minister’s Office, in consultation with the Finance Ministry’s Revenue Department and NITI Aayog, are reviewing the existing structure of the long term capital gains (LTCG) tax, CNBC Awaaz reported on 29 October.
Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman are planning a series of tax alignments for equities in the coming weeks in a bid to further boost investor sentiment and bring in much-needed foreign exchange into the government’s coffers, sources in the Finance Ministry and NITI Aayog told CNBC Awaaz.
The task force has also suggested the following new income-tax slabs:
- 10 percent for individuals earning up to Rs 10 lakh per year
- 20 percent for those with incomes above Rs 10 lakh and up to Rs 20 lakh
- 30 percent for incomes of over Rs 20 lakh and up to Rs 2 crore
- 35 percent for individuals earning more than Rs 2 crore
The report also suggests removing prosecution and reopening of assessment for those who declare and pay higher income tax for a past period of up to six years with interest and 50 percent penalty.
The current IT rates are 5 percent plus 4 percent cess for people earning between Rs 2.5 lakh and Rs 5 lakh, 20 percent plus 4 percent cess for incomes of more than Rs 5 lakh up to Rs 10 lakh, and 30 percent plus 4 percent cess for those earning over Rs 10 lakh, the report added.
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Updated Date: Nov 11, 2019 15:55:25 IST