The government panel on Direct Tax Code has reportedly proposed zero tax levy on annual income between Rs 0-2.5 lakh, 10 percent on income between Rs 5 -10 lakh, and 20 percent on income of Rs 10 to 20 lakh, a media report said.
According to CNBC-TV18, the "task force has proposed changes to boost consumption and to give relief to the middle-income group."
The report added that the task force has recommended 30 percent tax rate for income bracket of Rs 20 lakh - Rs 2 crore and 35 percent for the income of Rs 2 crore and above per annum.
According to The Economic Times, the task force has also recommended abolishing the dividend distribution tax while retaining the longterm capital gains tax and securities transaction tax. Dividends paid by a domestic company are subject to dividend distribution tax at 15 percent of the aggregate dividend declared, distributed or paid, the report added.
On Tuesday, Union Finance Minister Nirmala Sitharaman said that she asked the tax authorities to observe a "bit of restraint" and not to "overreach" while going about tax collection. "Businesses create jobs, create wealth for the country and therefore it is important for tax administrators to facilitate them while doing their job of tax collection and enforcing the tax rules," she said.
The task force headed by Central Board of Direct Taxes (CBDT) member Akhilesh Ranjan had submitted its report on the new Direct Tax Code in August.
The task force was supposed to submit its report by 31 May, but the then finance minister Arun Jaitley gave two months extension to complete the exercise.
Subsequently, the government allowed the task force to submit its report by August 16, 2019, in light of the fact that the new members of the task force requested for more time to provide further inputs.
The finance ministry in November last year appointed Akhilesh Ranjan, Member (Legislation), Central Board of Direct Taxes (CBDT), as convenor of the task force after the retirement of Arbind Modi.
Other members of the task force include Girish Ahuja (chartered accountant), Rajiv Memani (Chairman and Regional Managing Partner of EY), Mukesh Patel (Practicing Tax Advocate), Mansi Kedia (Consultant, ICRIER) and G C Srivastava (retired IRS and Advocate).
With PTI inputs
Updated Date: Aug 28, 2019 20:58:06 IST