S No

Suggestions in Brief

Explanation

1

The Basic Exemption Limit need not be raised this year.

Instead, tax rates may be reduced, by readjusting the slabs. 

For instance, the first slab may be revised as
"Above Rs.2.50 Lakhs and up to Rs.6.00 Lakhs" for which 10% tax will apply. 

The second slab will be reset as "Above Rs.6.00 Lakhs and up to Rs.12.00 Lakhs" for which 15% tax will be levied. 

The third slab will be "Above Rs.12.00 Lakhs and up to Rs.24.00 Lakhs" for which tax will be collected at 20%.

The fourth slab of "Above Rs.24.00 Lakhs and up to Rs.48.00 Lakhs", the applicable tax rate is 25%.   

People earning more than Rs.48.00 Lakhs a year will be required to pay 30% tax, on the amount exceeding Rs.48.00 Lakhs.

Telescopic benefit, as is available now, will continue.

2

Education Cess

The Education Cess which is at 3% now, must be brought down to 2% (1.00% for primary education, 0.50% for secondary education and 0.50% for higher education). 

3

Surcharge

Surcharge is now levied at 12% for net income exceeding Rs.1.00 Crore.  It is proposed to change it as follows. 

Surcharge will be levied at 6% for net income exceeding Rs.60.00 Lakhs.

4

Concessions to the Salaried Class

For persons belonging to the 'Salaried Class' from whom tax is deducted at source by their employer, a flat concession of 25% in the overall tax payable by them is to be offered.

However, the total amount of such concession (i.e. reduction in tax liability) is restricted to Rs.0.90 Lakhs.

Pensioners are also treated on an equal footing with the salaried persons for this purpose, to the extent of their pension income only.

5

Concessions to Women Assessees

No concession will be allowed for women assessees either in the basic exemption limit or in the tax slabs.

6

Concessions to Senior Citizens

Senior Citizens are to be allowed concession at a flat rate of 20% in their overall tax liability.

This is over and above the concession of 25% on their pension income, if any.

However, the total amount of such concessions shall be restricted to Rs.1,20,000 per year.

7

Interest Subsidy on Education Loans

The government must provide interest subsidy of 3% on all education loans, up to the limit of priority sector classification, regardless of the family income.

8

Exemptions / Rebates   under various Sections of I.T. Act

Exemptions/Rebates available under various Sections of I.T. Act as of now will continue, without any change in them.

They will remain frozen at the same level for the next few years.

Some of them will be either phased out or merged with other sections, in course of time.  

Ultimately, the total amount of all exemptions will be restricted to 25% of the gross annual income, due to raising of Basic Exemption of Limit and Reduction of tax rates, by readjustment of the slabs, in future.

S No

Suggestions in Brief

Explanation

9

Corporate Tax

'Corporate Tax' is to be brought to down to 25% (from 30%), on all types of companies.  Surcharge is to be abolished, while education cess may be retained. 

'Minimum Alternate Tax' (MAT) is to be brought down to 15% (from the existing level of 18.50% plus applicable surcharge thereon).

'Dividend Distribution Tax' is to be revisited and if possible, the existing rate of 17.65% may be reduced.

10

Service Tax

Until GST is introduced, the Service Tax is to be computed at the following rates, basing on the annual turnover indicated below.

(a)   Up to Rs.6.00 Lakhs                                   -  N I L

(b)   Above Rs.6.00 Lakhs to Rs.30.00 Lakhs      -  6%

(c)   Above Rs.30.00 Lakhs to Rs.120.00 Lakhs  -  9%

(d)   Above Rs.120.00 Lakhs                              -  12%

Telescopic benefit is to be made available, as in the case of Income Tax.

Essential Commodities must be subjected to a uniform service tax of 6%, regardless of the annual turnover.

11

Customs Duty

Customs Duty on Life Saving Drugs/Medicines, Medical Equipments and Machinery imported for manufacture of these items must be subjected to a customs duty of 3%, irrespective of their value.  However, beyond certain value, prior approval from Ministry of Commerce is to be obtained.

In case of Luxury goods including cosmetics and perfumes, white goods, automobiles (excluding those for mass transport), precious stones and jewellery, stitched clothes and garments beyond certain value per piece,  Entertainment Equipments & Machinery etc. are to be subjected to higher duty than now (These things require further explanation and debate).

All other items imported will continue to attract the existing rates of customs duty.

Additional Customs Duty is to be abolished totally.

12

Excise Duty

Excise Duty on for all edible items that include food grains and cereals, millets, pulses, edible oil, sugar, jaggery, salt, vegetables, fruits and nuts shall be subjected to a uniform excise duty of 2% only.

Tobacco, Tobacco products and Liquor must be taxed uniformly at 20%. 

All other products will be taxed uniformly at the rate of 6%. 

Additional Excise Duty must be abolished totally.

13

Sales Tax

To the extent possible, multi-point taxation must be abolished. At the most, a product may be subjected to taxation at 2 stages - production and distribution (first sale).

No additional Sales Tax is to be collected under any circumstances.

Octroi is to be abolished with immediate effect.

'Value Added Tax' (VAT) will continue, until GST is implemented.

Hotels, Restaurants, Hospitals, Medical Shops and other units engaged in health services shall be taxed at the uniform rate of 3%.  Educational institutions will be spared from any tax, only in respect of Tuition Fees and Exam Fees collected by them.  On all other receipts, they have to pay tax like any other commercial enterprise.

S No

Suggestions in Brief

Explanation

14

Overall Ceiling

An overall ceiling of 18% is to be fixed for all kinds of duties, taxes and other levies put together, on any product or service.  This ceiling is fixed for all central, state and local taxes and levies.

This is the golden rule. 

Nonetheless, the central government is empowered to tax Tobacco, Tobacco products, Liquor, Luxury Goods etc. at a higher rate.

15

Others

1.     Professional Tax must be abolished for the salaried class.

2.     Honest tax payers must not be harassed under any circumstances.

3.     Every year, tax assessment must be completed within 60 days from the date of submission of returns.

4.     In case of large assessees and institutions (companies, trusts, firms, societies and associations), this time limit may be kept at 90 days.

5.     All tax administration agencies and officials must function transparently and efficiently, respecting the assessees and their representatives.

6.     Corruption in the realm of direct and indirect tax administration must be done away with.