Current Affairs PDF

R V Easwar Committee’s report to simplify Income-tax Act, 1961 released

AffairsCloud YouTube Channel - Click Here

AffairsCloud APP Click Here

Union Ministry of Finance has released the draft report of 10 member committee headed by Justice R V Easwar (Retd) Committee to simplify the provisions of Income-tax Act, 1961.

  • The 78 page draft report contains 27 suggestions for amendments under the Income tax Act, 1961 and 8 recommendations for reform through administrative instructions.

Nearly 65% of the personal income-tax collection in India was through tax deducted at source (TDS).

R V Easwar Committee’s report to simplify Income-tax Act, 1961 releasedRecommendations related to TDS:

  • TDS rates for individuals and HUFs to be reduced to 5% as against the present 10%.
  • For interest on securities, TDS has been raised to Rs 15,000 from Rs 2,500 annually.
  • For other interest earnings the limit is recommended to be raised to Rs 15,000 for bank deposits and Rs 5,000 for others.
  • Raising TDS limit for payments to contractors from 75,000 annually to Rs 1 lakh annual.
  • TDS limit on rent income raised from Rs 1.8 lakh annually to Rs 2.4 lakh.
  • Fees for professional or technical services are recommended to be raised to Rs 50,000.

Recommendations to check or curb litigation/facilitate speedier disposal:

  • Amendment to Section 255(3) to enhance the monetary limit for SMC cases before the Tribunal to rupees 1 crore from the present rupees 15 lakhs.
  • Amendment to Section 254(2) to reduce the time-limit for rectification of orders of the Tribunal from the present four years to 120 days.
  • Deletion of section 143(1D) – Avoiding undesirable delay in issue of refunds.

Recommendations to promote ease of doing business and simplify procedures:

  • Suggested levying lower short-term capital gains tax on annual earning of less than Rs 5 lakh from trading of shares and not treating it as business income, so as to attract small investors to capital market and cut litigations.
  • Doubling the turnover limit for the presumptive income scheme for individual, Hindu Undivided Family or a partnership firm to ₹ 2 crore annually.
  • Introducing the scheme for professionals whose total receipts do not exceed ₹ 1 crore during the financial year.
  • Exemption to non-residents not having Permanent Account Number (PAN), but who furnish their Tax Identification Number (TIN) in their country of residence from the applicability of TDS at a higher rate under section 206AA.
  • Timely refund with interest and also providing for payment of higher interest in case of delayed refunds.
  • Proposal for mode of payment of TDS and filing of statement of TDS under the provisions of section 200.

In Oct 2015, 10-Member Committee has been formed with an objective to suggest measures to improve the ease of doing business, reduce litigation and accelerate the resolution of tax disputes.