On the day when a draft report to overhaul nearly 60 decade old direct tax code was submitted to the finance ministry, Union Finance Minister, Nirmala Sitharaman, said that corporate tax will be gradually cut to 25%.
Crux of the Matter
Current Indian government is planning to replace the Income Tax Act of 1961 with a new direct tax code. The existing tax code includes personal income tax, corporate tax and other levies such as the capital gains tax under its purview.
DTC (direct tax code) panel was originally constituted in November 2017 to rewrite the legislation that would affect 74 million direct taxpayers.
In her maiden budget last month, Union FM had announced lowering corporate tax rate for companies with less than ₹400 crore annual turnover from 30% to 25%.
The new direct tax code is also expected make personal income tax rates more ‘progressive’ for people in the 5% and 20% slabs.
Curiopedia
Income Tax in India – The government imposes a tax on taxable income of all persons who are individuals, Hindu Undivided Families (HUF’s), companies, firms, LLP, association of persons, body of individuals, local authority and any other artificial juridical person. Levy of tax on a person depends upon his residential status. The CBDT administers the Income Tax Department, which is a part of the Department of Revenue under the Ministry of Finance, Govt. of India. Income tax is a key source of funds that the government uses to fund its activities and serve the public. The Income Tax Department is the biggest revenue mobilizer for the Government. More Info
Curated Coverage
Livemint – Government panel moots tax relief for companies
Financial Express – Corporate tax to be cut gradually to 25%: Nirmala Sitharaman
Money Control – Direct Tax Code: After several delays, task force submits report
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