General Studies- II – Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
- Accordingly, in order to review the Act and to draft a new direct tax law in consonance with economic needs of the country, the Government has constituted a task force.
- The task force will submit its report to the government within 6 months.
- Chief Economic Adviser Arvind Subramanian will be a permanent special invitee in the task force.
- The panel has been tasked to draft a direct tax legislation keeping in view the tax system prevalent in various countries, the international best practices and economic needs of the country.
- The Direct Taxes Code (DTC) Bill, 2010, which was introduced in Parliament in 2010, lapsed with the dissolution of the 15th Lok Sabha.
- The Bill had proposed annual I-T exemption limit at Rs 2 lakh, and levying 10 per cent tax on income between Rs 2 lakh and Rs 5 lakh, 20 per cent on Rs 5-10 lakh and 30 per cent above Rs 10 lakh. For domestic companies it suggested tax rate of 30 per cent of business income.
- The NDA government, since coming to power in 2014, has already implemented general anti-avoidance rules GAAR. In 2016 Finance Minister Arun Jaitley also promised to lower corporate tax rate to 25 per cent in 5 years.
- Currently, income up to Rs 2.5 lakh per annum is exempt from tax for individuals.