Recently, the government on 10th September 2019 made a plan. They are going to replace the Income Tax Act with Direct Tax Code. Therefore, this will the act in which only incorporate select suggestions from draft law will be there. This step has been taken to avoid creating uncertainty for the business economic slowdown.
A person privy to discussions in government says that “some suggestions in the draft legislation are submitted to the Finance Minister.” He added that she will find a way through amendments in the next budget session of the Parliament.
This is a way that will help in making the law modern and will further help in dealing with new business. Therefore, the idea of replacing this closed six-year-old decade law is less appealing. But this will help in unsettling well-established jurisprudence, which would further create uncertainty for business. Hence, this would help very much in grappling with a deep economic downturn.
The Finance Minister of India has not yet proposed the report to the expert panel. But the panel has proposed a significant relief for taxpayers. They have created around 25% tax rates for both local and foreign companies. There are so many changes in the personal tax slabs also. Therefore, the changes in the tax rate will be a continuous process and will be executed through the Annual Finance Acts.
According to the recent agenda, the government has raised the sub charge levied on income tax outgo of individuals. Therefore, the earnings are more than Rs.2 crore for 2 slabs. Hence all those earning Rs.2 to 5 crores are going to pay 39% tax on income exceeding. Whereas all those earning more than Rs.5 crore are going to pay 42.7% income exceeding.
Stay glued to know more about the suggestions of Government of India.