The government is reportedly reviewing a report submitted by a task force on direct taxes, and might implement some of the recommendations during the Budget
A rejig in income tax slabs and a change in capital gains tax may boost the government's revenues by over Rs 55,000 crore, according to a report by The Economic Times.
“There could be an overall gain in revenues if the recommendations are implemented in full,” a source told the paper.
Moneycontrol could not independently verify the report.
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 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 October 29.
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 task force has also proposed scrapping surcharge that ranges between 15 and 37 percent, The Economic Times reported.
The report has not proposed scrapping of the Securities Transaction Tax (STT) on equities.
The report has recommended continuing with the existing LTCG tax structure of 10 percent on equities worth Rs 1 lakh held for over a year. Maintaining the current short term capital gains (STCG) tax of 15 percent on equity assets has also been proposed.The task force has suggested 20 percent tax on gains from the sale of non-equity assets held for over 24 months.LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.