The threshold limit for levy of wealth tax was raised to Rs 15 lakh. The share of revenue from direct taxes showed a significant increase as a proportion of GDP as well as total tax revenue.
The contribution of revenue from direct taxes, which was less than 14 per cent inincreased sharply to 24 per cent in However, decline in the revenue from excise duties was faster, by 1. Tax reform since was initiated as a part of the structural reform process, following the economic crisis of There are two ways of simplifying the tax system: Moreover, a modest beginning was also made in order to extend indirect taxes on services such as, telephones, non-life insurance and stock brokers.
Moreover, tax reforms have induced a structural shift in the composition of tax revenue. A large number f pending cases in courts have been decided through out of court settlements. Again the share of direct taxes in the gross tax revenue of the Centre rose from about 19 per cent in to an estimated 29 per cent in In respect of both excise and custom duties, there has been a drastic cut in the number of end use notifications, which will greatly reduce the possibility of disputes and the scope for discretion.
Proper levy of goods and services tax would, therefore, require an amendment of the Constitution. Five year tax holiday for investments in infrastructure facilities highways, bridges, airports, ports and mass rapid transportpower generation and distribution in backward states and electronics hardware and software parks were allowed.
Overall tax reforms since July have helped in correcting the imbalance in the structures of revenue source. Thus these taxes may be integrated into a single tax system. Built-in Flexibility and Buoyancy: Consequently, the share of excise duties in total revenue declined by about 7 percentage points from 28 to 21 per cent as compared to a 6 percentage point decline in the share of customs from 24 to 18 per cent.
The dividend tax at the individual income tax level has been abolished. The wealth tax, which was earlier applicable to all personal assets such as bank deposits, shares and other securities. Substantial progress has been achieved in this regard in the past five years.
The continued heavy reliance on import duties as a source of revenue rather than as an instrument of protection is an issue that merits some discussion. Long-term capital gains tax on domestic companies was reduced from 40 to 30 per cent.
Taxes like union excise duties and income tax are within this category. Govinda ; Rao, R. The system of presumptive tax lump-sum for small traders, retailers and small road transport operators was introduced.
Implementation of reforms since The government accepted the recommendations of the TRC and has implemented them in phases. In respect of indirect taxes the Committee recommended a reduction in the general level of tariff and in the dispersion of tariff rates and the abolition of end-use exemptions and concession.
It had suggested a peak rate of 50 percent. The constitution has made a provision for division of power for levying taxes between the centre and the States in most unambiguous manner. In India, the indirect taxes are playing a predominant role and the direct taxes are playing a secondary role.
Thus, the tax-GDP ratio, which was over 16 per cent in 91, declined sharply to less than 14 per cent in Considering all these above mentioned features, Prof.In its report submitted to the Government in Januaryit has made several recommendations for reforming India’s tax structure.
Overall tax reforms since July have helped in correcting the imbalance in the structure of revenue sources.
This website includes study notes, research papers, essays, articles and other allied. Tax Reforms. IMPACT OF TAX REFORMS SINCE Tax reform since was initiated as a part of the structural reform process, following the economic crisis of Direct Tax Reforms: 1.
As per the recommendations of the TRC the personal tax brackets were only three, of. Essay on Indian Tax Structure.
Article shared by: Overall, tax reforms since July have helped in correcting structural imbalances in the entire tax system, which by and large engender inefficiencies and distortions.
Overall, tax reforms in India since July have helped in correcting the imbalance in the structure of revenue. Overall, tax reforms in India since July have helped in correcting the imbalance in the structure of revenue sources.
The share of direct taxes already rose from. Some of the important policy initiatives introduced in the budget for the year for correcting the fiscal imbalance were: reduction in fertilizer subsidy, abolition of subsidy on sugar, disinvestment of a part of the government’s equity holdings in select public sector undertakings, and acceptance of major recommendations of the Tax Reforms Committee headed by Raja Chelliah.
IMPACT OF TAX REFORMS SINCE As in other countries, the systemic reforms in the tax system in India in the s were the product of crisis but the reforms were calibrated on the basis of detailed analysis.
Tax reform since was initiated as a part of the structural reform process, following the economic crisis ofDownload