{"id":166499,"date":"2022-02-04T20:53:38","date_gmt":"2022-02-04T15:23:38","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=166499"},"modified":"2022-02-04T20:53:38","modified_gmt":"2022-02-04T15:23:38","slug":"a-less-taxing-state","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/a-less-taxing-state\/","title":{"rendered":"A less taxing state"},"content":{"rendered":"\n

News: <\/span><\/b>India has had a very high rate of tax litigation. Therefore, Government has recently announced that the overarching aim of direct tax policy reform is to move towards a simpler regime, without exemptions and low rates<\/span>.<\/span> \u00a0<\/span><\/p>\n

What has been the status of tax litigation in the country?<\/span><\/b>\u00a0<\/span><\/h5>\n

In 2014-15, about Rs 2.1 lakh crore had been under dispute for a duration between one and two years. By <\/span>2020-21<\/span><\/b>, it had increased more than threefold to <\/span>Rs 6.6 lakh crore<\/span><\/b>. This also <\/span>limits the tax collection.<\/span><\/b>\u00a0<\/span><\/p>\n

How a simpler tax regime for corporate tax is helpful?<\/span><\/b>\u00a0<\/span><\/h5>\n

Sovereign governments face limitations in setting tax rates on companies because capital is mobile<\/span>. Therefore, a shift to a simpler tax regime will reduce the incidence of litigation and, thereby, attract more investment. <\/span>\u00a0<\/span><\/p>\n

How personal income tax can be made more appropriate as per the current economic situation?<\/span><\/b>\u00a0<\/span><\/h5>\n

Around 75% of the returns filed are for income below Rs 5 lakh.<\/span> Therefore it is important to reform this aspect of revenue collection as well.<\/span>\u00a0<\/span><\/p>\n

The current <\/span>threshold for tax, which is Rs 2.5 lakh, needs to be indexed to inflation.<\/span><\/b> The current floor has been in place since July 2014. Inflation has effectively lowered the tax threshold over succeeding years. Linking it with inflation makes it fairer.<\/span>\u00a0<\/span><\/p>\n

Also there is a need to decide a timeline when <\/span>everyone can be moved to a regime without exemptions<\/span><\/b> except the retirement savings, and also the <\/span>process of filing returns should be made<\/span><\/b> more <\/span>simple<\/span><\/b>.<\/span> \u00a0<\/span><\/p>\n

Source: <\/span><\/b>This post is based on the article \u201c<\/span>A less taxing state<\/span><\/b>\u201d published in <\/span>Times of India <\/span><\/b>on 4<\/strong><\/span>th<\/strong> Feb 2022<\/strong>.\u00a0\u00a0\u00a0<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

News: India has had a very high rate of tax litigation. Therefore, Government has recently announced that the overarching aim of direct tax policy reform is to move towards a simpler regime, without exemptions and low rates. \u00a0 What has been the status of tax litigation in the country?\u00a0 In 2014-15, about Rs 2.1 lakh… Continue reading A less taxing state<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10496],"class_list":["post-166499","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-times-of-india","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704872243},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/166499","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=166499"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/166499\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=166499"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=166499"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=166499"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}