In a bid to ‘simplify’ the taxation system in the country, Finance Minister Nirmala Sitharaman had announced a new tax regime during her Union Budget speech. (Photo Credit: PTI File Photo)
Union Finance Minister Nirmala Sitharaman will table the ‘Vivad Se Vishwas’ Bill in the Lok Sabha on Wednesday. The Bill, which was introduced in the Union Budget speech, will focus on previous direct tax disputes. The Bill is aimed at addressing the ‘tax terrorism’ issue, which has been a bone of contention amid the miniscule taxpaying community of the country. While announcing the scheme during the Union Budget 2020, Nirmala Sitharaman said that, “those who avail this scheme after March 31, 2020, will have to pay some additional amount. The scheme will remain open till June 30, 2020." The new Bill is line of the Modi government’s sustained efforts to minimise the tax disputes.
In the last budget, the Modi government had brought in 'Sabka Vishwas Scheme' to reduce litigation in indirect taxes. It had resulted in settling over 1.89 lakh cases and the government is estimated to have collected more than Rs 39,000 crore in taxes. At present, there are 4.83 lakh direct tax cases pending in various appellate forums -- Commissioner (Appeals), Income Tax Appellate Tribunal (ITAT), High Court and Supreme Court.
In a bid to ‘simplify’ the taxation system in the country, Finance Minister Nirmala Sitharaman had announced a new tax regime for individual taxpayers. Sitharaman announced change in the income tax slabs revising income tax rates for earning up to Rs 15 lakh, while no tax will be applied on earnings up to Rs 5 lakh. The new slabs have significantly reduced the taxes for most of the brackets. Those earning Rs 5-7.5 lakh will now pay just 15 per cent, while those earning up to Rs 5 lakh in a year will pay no tax. If you are earning between Rs 10 lakh to Rs 12.5 lakh and between Rs 12.5 lakh and Rs 15 lakh, you will have to pay lesser tax than before.
The cut in income tax rates, which would help save about Rs 31,000 a year in tax for persons with annual income of up to Rs 17 lakh, was however conditioned on current exemptions and deductions including standard deduction for Rs 50,000 as well as the waiver earned on payment of up to Rs 1.5 lakh in tuition fee of children, and contribution towards insurance premium and provident fund, being given up.
In the last budget, the Modi government had brought in 'Sabka Vishwas Scheme' to reduce litigation in indirect taxes. (File Photo)
Sitharaman had presented the second budget of Modi 2.0 in Parliament on Saturday. The Budget, also the second for the Finance Minister, aims to revive the economy to pull it out of its worst slowdown in more than a decade. India is currently staring at an estimated 5 per cent growth rate- the slowest since 2009.