DTC panel suggests cut in income tax, corporation tax

New Delhi, Aug 20: The Direct Tax Code (DTC) task force has proposed a rethink on a significant increase in the highest income tax slabs, besides slashing corporate tax rate to an even rate of 25 per cent for both domestic and foreign companies.

She, however, did not give a time frame for this move. The government has, over the last five years, trimmed the rate to 25 per cent from 30 per cent in a phased manner for 99.3 per cent of companies.

The eight-member task force, led by Central Board of Direct Taxes member Akhilesh Ranjan, submitted the report to Finance Minister Nirmala Sitharaman on Monday.

Income taxpayers earning up to Rs 55 lakh per annum may end up with major tax relief if recommendations to change the tax bracket and rebates are accepted.

In her maiden Budget last month, she had cut corporate tax for companies with an annual turnover of up to Rs 400 crore to 25 per cent from 30 per cent earlier.

"I would like to underline the fact that we are conscious of that the Indian entrepreneurs are the ones who have been the wealth creators, job creators of this country...we are proud of them and we shall keep supporting them. Every attempt of the government will be towards promoting them, to understand them and also to facilitate them," she said.

"That is the spirit with which many of the things have been announced and that is why the corporate tax was brought down," she added.

In 2018, the then Finance Minister Arun Jaitley had cut the corporate income tax rate to 25 per cent for companies with a turnover of up to Rs 250 crore.