Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty.

Pay high income tax? Govt may call you to have tea with the PM or FM

In a rather unconventional plan, the Ministry of Finance has decided to reward India's top income tax payers by inviting them to tea with the prime minister or the finance minister.

The idea is to encourage taxpayers to willingly pay more, according to a report published in Livemint. The scheme is likely to figure in Modi's government's first Budget session, after being re-elected in the recently conducted Lok Sabha elections. Along with the privilege of having tea, the taxpayers will also get other non-monetary incentives.

Government data shows that 1,053 individuals with incomes of Rs 5 crore or more contributed over Rs 12,000 crore in personal income tax in assessment year 2017-18.

Currently, the income tax department issues certificates of appreciation to those who pay their taxes diligently.

The plan to honour top taxpayers comes amid the government's need to meet the fiscal deficit target and the revenue department's need to find additional resources for welfare schemes.

Direct tax receipts for the year ended March 31 missed the government’s revised target of Rs 12 trillion. At the close of the fiscal year 2018-19, direct tax collection touched Rs 11.5 trillion, leaving a gap of Rs 50,000 crore against the revised revenue target of Rs 12 trillion.

An expert committee on revamping the Income Tax Act is expected to submit its report by the end of July.

Tax bracket

At present, individuals who earn between Rs 50 lakh and Rs 1 crore a year pay a surcharge of 10% and those with incomes above Rs 1 crore pay a 15% surcharge on their taxable income. Businesses, too, pay surcharge on incomes above Rs 1 crore.

Domestic companies with incomes in the range of Rs 1-10 crore, a 7% surcharge is applicable

Surcharge goes up to 12% for domestic companies and 5% for foreign companies with incomes above Rs 10 crore.
Refer:www.business-standard.com

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