ITR filing: Direct Tax task force recommends new personal income tax slabs
ITR filing: Personal income is currently taxed at 5 per cent for income between Rs 2.5 and Rs 5 lakh, at 20 per cent for income between Rs 5 lakh and Rs 10 lakh, and 30 per cent for an income of over Rs 10 lakh.
ITR filing: In a bid to rationalisation tax and revive the economy by putting more money in the pockets of the middle income group, a government constituted Direct Tax Code task force is arguing for a new tax regime for individuals. The task force, headed by CBDT member Akilesh Ranjan, has proposed dramatic changes to the Income Tax Act, which dates back 58 years, said an IANS report.
If recommendations of this high-level tax force are accepted, individuals earning between Rs 5 lakh and Rs 10 lakh per year may have to pay 10 per cent income tax,the report said, adding that radical changes in personal income tax slabs have been proposed, including the lowering of personal income tax for those earning between Rs 10 to Rs 20 lakh per year to 20 per cent.
Notably, personal income is taxed at 5 per cent for income between Rs 2.5 and Rs 5 lakh, at 20 per cent for income between Rs 5 lakh and Rs 10 lakh, and 30 per cent for an income of over Rs 10 lakh.
The task force has also recommended five tax brackets of 5 per cent, 10 per cent, 20 per cent, 30 per cent and 35 per cent, against the prevailing structure of 5 per cent, 20 per cent and 30 per cent, said the report, citing sources close to developments.
It further said that those earning an annual income up to Rs 5 lakh will get a rebate on the taxes paid, as was announced in the interim budget of February 2019, thereby, those with an income of up to Rs 5 lakh will be charged zero tax.
The report was submitted to Finance Minister Nirmala Sitharaman on August 19, but it has not been made public yet. The panel has recommended that income tax for those earning above Rs 20 lakh and till Rs 2 crore, continue to remain at the previous rate of 30 per cent, said the report, adding that the task force has also proposed to introduce a new top tax bracket of 35 per cent for the super-rich, that is those earning above Rs 2 crore in a year, and doing away with the surcharge.
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The panel has reportedly recommended removal of dividend distribution tax and scrapping minimum alternate tax, besides asking the government to avoid levying surcharges.
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