The National Democratic Alliance (NDA) government, in its second term, plans to introduce transformational changes in the direct tax regime by pruning a tax rate that is as high as 30%, widening the tax base and making it easier for honest individuals and corporate entities to comply with tax laws. In its first term, the NDA government, led by Narendra Modi, introduced the Goods and Services Tax (GST) on July 1, 2017, to revamp the direct tax regime. Now, the finance ministry has been asked to speed up the framing of the Direct Tax Code (DTC) and incentivise individuals and companies to voluntarily file their tax returns, as the government seeks to widen the direct tax base, two officials with direct knowledge of the matter said on condition of anonymity. The task force had been initially expected to submit its report by May 2018, but ran into delays. Lower tax rates, the government hopes, will act as an incentive for taxpayers to comply with the direct tax regime, file returns and pay tax, augmenting its revenue.

Source: Hindustan Times June 02, 2019 01:41 UTC