Topics income tax law | Income tax | Direct Taxes Code
In her maiden Budget speech, Sitharaman had cut corporate tax for firms with annual turnover of up to Rs 400 crore to 25 per cent from 30 per cent, covering 99.3 per cent companies. “Only 0.7 per cent are left... Even for them gradually we will be able to bring down the tax to the level of 25 per cent," Sitharaman said at an event on Monday. In 2018, then finance minister Arun Jaitley had cut the corporate income tax rate to 25 per cent for firms with a turnover of up to Rs 250 crore. The panel also favoured doing away with Dividend Distribution Tax by suggesting taxing dividends in the hands of shareholders. ALSO READ: Corporate tax for firms with over Rs 400 crore turnover to be cut gradually The task force suggested replacing the concept of assessing officer with assessment units, besides faceless scrutiny of cases picked through centrally and randomly allotted mechanism. Aimed at reducing tax litigation, the panel recommended the concept of mediation between taxpayer and CBDT. Taxpayers may be allowed to opt for negotiated settlement before a Collegium of Commissioners once they receive the draft order, according to sources. Last week, the CBDT sharply raised the threshold for filing appeals in tax disputes to reduce tax litigation. They increased the amount for Income Tax Appellate Tribunal to Rs 50 lakh from Rs 20 lakh, for High Court from Rs 50 lakh to Rs 1 crore and Surpreme Court to Rs 2 crore from Rs 1 crore. Besides, the panel recommended a Litigation Management Unit to manage the entire tax litigation process, right from deciding in which cases the appeals ought to be filed to devising the strategy to defend a case, according to sources. For transfer pricing cases, a separate functional assessments unit may be set up for a block of 4 years, sources said. The report is likely to be put up for public suggestions. The government had last month expanded the scope of the task force to look into five more areas and nominated two new members — Chief Economic Advisor Krishnamurthy Subramanian and Joint Secretary (Revenue) Ritvik Pandey. The report included new terms of reference such as faceless and anonymised scrutiny, mechanism for system-based cross verification of the financial transactions, reduction in litigation and expeditious disposal of appeals. Rakesh Nangia, managing partner, Nangia Advisers said India Inc. awaits to see bold reforms that will show up in the new foundation of direct taxes.Direct Tax Code 2.0
- Those earning up to Rs 55 lakh may get major tax relief
- Foreign firms may have to pay branch profit tax
- Dividend distribution tax may be done away with
- Slew of incentives for start-ups recommended
- Assessing units to replace assessment officers
- Mechanism of mediation between taxpayer and CBDT
- Proposed DTC to have far fewer sections than over 700 in the Income Tax Act