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Regular-article-logo Tuesday, 16 July 2024

Tax panel critical of new regime

The alternative tax structure proposed by Nirmala Sitharaman covers six tax rates between 5% and 30%

Pinak Ghosh Calcutta Published 11.03.20, 10:23 PM
Nirmala Sitharaman in Calcutta.

Nirmala Sitharaman in Calcutta. Telegraph file picture

The task force on Direct Tax Code was in favour of a tax structure that would offer some exemptions to encourage savings.

According to Girish Ahuja, a member of the panel, the government should have considered keeping at least three exemptions in the alternative tax structure — standard deduction for salaried individuals and deductions under sections 80C and 80D of the Income Tax Act.

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The alternative tax structure proposed by finance minister Nirmala Sitharaman covers six tax rates between 5 per cent and 30 per cent. But to get the alternative structure, that comes into effect from next year, most exemptions have to be given up.

“I am not very happy. I think very few people will go for the new structure. The habit of saving was driven by the benefit of income tax. We talk about wealth creation, where would be the wealth creation if there are no savings?” said Ahuja, who was in the city to speak on an event organised by the Eastern India Regional Council of the Institute of Chartered Accountants (ICAI).

“Our suggestion was to keep three things — standard deviation for salaried, and exemptions under section 80C and 80D,” Ahuja said.

Training proposal

Nitish Kumar More, chairman of Eastern India Regional Council of ICAI, has proposed free financial and accounting consultancy along with training programme of officers and employees of the Bengal government.

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