NEW DELHI: A high-level government task force on direct taxes has proposed a rethink on the brackets, review of the surcharges levied on income tax, a regime that encourages startups and a revamp of the I-T Act to make it taxpayer-friendly, said people with knowledge of the matter. It is understood to have suggested changes to the tax brackets, in what could lead to significant relief for the middle and upper middle class; a rate of 25% for both domestic as well as foreign companies, which face 40% tax now; and a concept of negotiated settlement via mediation that’s popular overseas.
The committee submitted its report to finance minister Nirmala Sitharaman on Monday. The government hasn’t made the report public. “Overall, the emphasis is on designing a tax regime that is simple on compliances, faceless in all interactions with taxpayers and fosters businesses,” one of the persons said, adding that the report is consistent with the philosophy expressed by Prime Minister Narendra Modi in his interview to ET earlier this month and reiterated in his Independence Day add address. The task force was headed by Akhilesh Ranjan, member, Central Board of Direct Taxes (CBDT). The committee had to submit its report by May 31 but the then finance minister Arun Jaitley gave it two months more to complete the exercise.
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