29 September, 2020

Towards Wider Direct Tax

The idea is to hold maximum people in the net. For, data still shows low compliance.

Towards Wider Direct Tax
outlookindia.com
2017-02-04T11:35:03+05:30

The Union Budget 2017 carries a distinct set of tax proposals for each of the three broad group of taxpayers—individuals, domestic corporates and multi-national enterprises. There are also a set of tax proposals to capture those who have historically avoided being in the tax net.

Coming to the first group of individual taxpayers, who the finance minister applauded for being honest and compliant, the proposals have two features: a marginal relief to those in the lowest tax-bracket (earning less than Rs 500,000 per annum) by reducting their tax rate to 5 per cent, and a surcharge of 10 per cent on those who earn greater than Rs 50 lakhs and up to Rs 1 crore. Those earning higher than Rs 1 crore were already subjected to a surcharge of 15 per cent. The finance minister’s intent for not exempting those earning less than Rs 5 lakh from a personal tax liability, albeit it is quite nominal, is possibly to keep maximum people in the tax system. Hidden in the fine print: a tax deduction on housing interest on rental properties can be set off against other incomes (such...

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