The idea is to encourage taxpayers to willingly pay more.
In
a rather unconventional plan, the Ministry of Finance has decided to
reward India's top income
tax payers by inviting them to tea with the prime minister or the
finance minister.
The
idea is to encourage taxpayers to willingly pay more, according to a
report published in Livemint. The scheme is likely to figure in
Modi's government's first Budget session, after being re-elected in
the recently conducted Lok Sabha elections. Along with the privilege
of having tea, the taxpayers will also get other non-monetary
incentives.
Government
data shows that 1,053 individuals with incomes of Rs 5 crore or more
contributed over Rs 12,000 crore in personal income tax in assessment
year 2017-18.
Currently,
the income tax department issues certificates of appreciation to
those who pay their taxes diligently.
The
plan to honour top taxpayers comes amid the government's need to meet
the fiscal deficit target and the revenue department's need to find
additional resources for welfare schemes.
Direct
tax receipts for the year ended March 31 missed the government’s
revised target of Rs 12 trillion. At the close of the fiscal year
2018-19, direct tax collection touched Rs 11.5 trillion, leaving a
gap of Rs 50,000 crore against the revised revenue target of Rs 12
trillion.
An
expert committee on revamping the Income
Tax Act is expected to submit its report by the end of July.
Tax
bracket
At
present, individuals who earn between Rs 50 lakh and Rs 1 crore a
year pay a surcharge of 10% and those with incomes above Rs 1 crore
pay a 15% surcharge on their taxable income. Businesses, too, pay
surcharge on incomes above Rs 1 crore.
Domestic
companies with incomes in the range of Rs 1-10 crore, a 7% surcharge
is applicable
Surcharge
goes up to 12% for domestic companies and 5% for foreign companies
with incomes above Rs 10 crore.
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