Funding coronavirus fight: Tax officers suggest 40% tax on super-rich, higher levy on foreign cos

Economy


MUMBAI: A group of senior
tax
officers has suggested a
super
rich
tax and a
higher
levy
on
foreign companies to keep the cash till running as part of short term measures to help the government fight the
coronavirus pandemic.

The suggestions are part of a paper titled ‘Force‘, which stands for ‘Fiscal Options & Response to the COVID-19 Epidemic’, submitted by the Indian Revenue Service (IRS) Association to CBDT (Central Board of Direct Taxes) Chairman P C Mody.

According to the paper, dated April 23,
tax relief should be restricted to honest and compliant taxpayers, especially those filing returns
on time as there have been many instances of non-filing of returns, increase in non-deductions and withholding of TDS apart from rising under-reporting of
tax liabilities through bogus loss claims.

Loading...

The central government has frozen the inflation-linked allowance for its employees and pensioners, a move that will help it save around Rs 37,000 crore.

Some of the short term measures suggested in the paper include a
super
rich
tax by raising the highest slab rate to
40 per cent for those with an income above Rs 1 crore from 30 per cent and re-introduction of wealth
tax for those with over Rs 5 crore annual income.

Short term refers to a time period of 3-6 months.

As per the paper, a copy of which is with PTI, the surcharge introduced in the Budget 2021
on the
super
rich may generate only Rs 2,700 crore to the exchequer and therefore the call to up the
tax slab
on the
super
rich. Individuals having a taxable income of Rs 1 crore are considered as
super
rich.

The paper has been prepared by a group of 50 IRS
officers.

The group has also suggested that the ultra-rich be taxed through two alternative ways which can be imposed for a limited time. One, up the highest slab rate to
40 per cent
on income of over Rs 1 crore from 30 per cent now and two, re-introduce wealth
tax for those with a net wealth of Rs 5 crore.

For the medium term, 9-12 months time period, the paper has suggested raising additional revenue from
foreign companies operating in the country by hiking the surcharge
on their income from the present 2 per cent for Rs 1-10 crore and at 5 per cent
on incomes exceeding Rs 10 crore.

They have also called for imposing a COVID-19 cess to help mobilise additional revenue. The one-time ‘COVID Relief Cess’ of 4 per cent can help finance capital investment, as per the paper.

According to an initial assessment, such a cess can fetch Rs 15,000-18,000 crore for the exchequer, the paper said.



Source link

Articles You May Like

With Covid restrictions gone, demonetisation cash deposits back under the Income Tax scanner
Covid-19: Relief measures extension likely for road sector
DPIIT to seek cabinet nod for multi-modal logistics hub, 2 industrial corridors
How to plan for retirement when you are in your 50s
Energy Infrastructure: India Ratings maintains negative outlook on transport, energy infra for second half of FY21

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading...