New Delhi, July 25 dmanewsdesk: The government’s endeavour has been to further simplify the Direct Tax laws and has brought in a major reform by giving option to taxpayers to opt for a new simpler tax regime, Finance Minister Nirmala Sitharaman said on Friday.
In her message on the 160th Income Tax Day, the minister also lauded the department for being responsive to the needs of the taxpayers during this pandemic time by relaxing various compliance requirements and addressing their liquidity concerns.
Appreciating its continuous efforts towards making the tax administration taxpayer-friendly, transparent and geared towards facilitating voluntary compliance, she said there has been a paradigm shift in its role in recent years, from being just a revenue collecting organisation to becoming a more citizen-centric establishment.
“Our endeavour has been to continue the initiative of simplification of Direct Tax laws. In line with the same, we brought in a major tax reform by ushering in a new simpler tax regime for our taxpayers, who now have the option of remaining in the old tax regime or moving to the new simpler regime,” Sitharaman said.
She said the government has reduced corporate tax rates by phasing out exemptions, while encouraging businesses to start manufacturing which is in tandem with the clarion call of Aatmanirbhar Bharat given by Prime Minister Narendra Modi.
She said that the department has effectively deployed technological tools to facilitate honest tax payers and also plug revenue leakage.
“Confident that the department will not only continue to play a critical role in the growth and prosperity of the nation, but will also strive to keep improving and set new standards of professionalism,” the minister added.
She lauded the department for keeping pace with the fast changing economic landscape and adapting to the concomitant challenge of ensuring that tax revenues grow commensurate with the pace of economic growth.
Minister of State for Finance and Corporate Affairs Anurag Thakur in his message appreciated the department for its efforts in providing efficient taxpayer services, observing that processes, across the spectrum of departmental functioning, have been made easier to comply with.
Finance Secretary Ajay Bhushan Pandey recognised the measures adopted by the department for imparting transparency to its processes and eliminating scope for unwarranted use of discretionary powers as demonstrated by new initiatives like faceless assessment, improved form 26AS, pre-filled returns.
PC Mody, Chairman, CBDT, reiterated the commitment towards further improving the compliance experience for taxpayers.
Offering an optional lower rate of income tax to individuals, the finance minister in her Budget for 2020-21 had proposed new optional tax regime under section 115BAC of I-T Act for individuals willing to forego certain specified deductions or exemptions while computing total income for tax purpose.
Under this, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning between Rs 2.5 lakh and Rs 5 lakh will pay 5 per cent tax. Income between Rs 5 and 7.5 lakh will be taxed at 10 per cent, while those between Rs 7.5 and 10 lakh at 15 per cent.
Those earning between Rs 10 and 12.5 lakh will pay tax at the rate of 20 per cent, while those between Rs 12.5 and Rs 15 lakh will pay at the rate of 25 per cent. Income above Rs 15 lakh will be taxed at 30 per cent.
The new I-T slabs would be for individuals not availing certain specified deductions or exemptions.